Endophytic fungi, particularly in the genus Neotyphodium, are thought to interact mutualistically with host grasses primarily by deterring herbivores and pathogens via production of alkaloidal mycotoxins. Little is known, however, about how these endophytes interact with host plants and herbivores outside the realm of agronomic forage grasses, such as tall fescue, and their livestock grazers or invertebrate pest herbivores. We tested the effects of Neotyphodium inhabiting introduced tall fescue and native Arizona fescue on preference, survival, and performance of the leaf-cutting ant, Acromyrmex versicolor, an important generalist herbivore in the southwestern United States. In a choice experiment, we determined preferences of foraging queens and workers for infected and uninfected tall fescue and Arizona fescue. In a no-choice experiment, we determined queen survival, worker production, and size of fungal gardens for foundress queens reared on diets of infected and uninfected tall fescue and Arizona fescue. Foraging workers and queens did not significantly prefer either uninfected tall fescue or Arizona fescue relative to infected grasses, although ants tended to harvest more uninfected than infected tall fescue and more infected than uninfected Arizona fescue. Queen survivorship and length of survival was greater on uninfected tall fescue, uninfected Arizona fescue, and infected Arizona fescue than on infected tall fescue or the standard diet of palo verde and mesquite leaves. No queens survived beyond 6 weeks of the study when fed the infected tall fescue diet, in contrast to the effects of the other diets. Likewise, worker production was much lower and fungal garden size much smaller on infected tall fescue than in all other treatments, including the standard diet. In general, ant colonies survived and performed better on uninfected tall fescue and infected and uninfected Arizona fescue than standard diets of palo verde and mesquite leaves. The interaction of Neotyphodium with its host grasses is highly variable and these endophytes may increase, not alter, or even decrease resistance to herbivores. The direction of the interaction depends on host and fungal genotype, herbivore species, and environmental factors. The presence of endophytes in most, if not all, host plants suggests that endophytes may alter foraging patterns, performance, and survival of herbivores, such as leaf-cutting ants, but not always in ways that increase host plant fitness.