Phoma medicaginis was isolated as the dominant endophyte from surface-sterilized shoots of Medicago sativa and M. lupulina growing outdoors. Plants were either symptomless or showed signs of infection in the shape of limited lesions which sometimes contained melanized pycnidial initials. Rapid colonization of host tissue and sporulation were observed within 9 d on dead plant material upon incubation in a moist chamber. Such colonized material, but not freshly harvested living tissue, contained brefeldin A (1.7 microg g(-1) D.W.). This toxin was also produced in pure culture (20 mg l(-1)) and in artificially inoculated autoclaved M. sativa stems (3 mg g(-1) D.W. =920 microg ml(-1)). The latter concentration of brefeldin A should be similar to that produced within a fruiting lesion of P. medicaginis and suppressed spore germination and growth of nine of 11 common phylloplane fungi tested. This metabolite may thus have a function in substrate defence after the switch from the endophytic to the saprotrophic period in the life-cycle of P. medicaginis following the death of infected host tissue.