Effects of the arbuscular mycorrhizal fungus (AMF) Glomus hoi on the carbon economy of perennial ryegrass (Lolium perenne) were investigated by comparing nonmycorrhizal and mycorrhizal plants of the same size, morphology and phosphorus status. Plants were grown in the presence of CO2 sources with different C isotope composition (delta13C -1 or -44). Relative respiration and gross photosynthesis rates, and belowground allocation of C assimilated during one light period ('new C'), as well as its contribution to respiration, were quantified by the concerted use of 13CO2/12CO2 steady-state labelling and 13CO2/12CO2 gas-exchange techniques. AMF (G. hoi) enhanced the relative respiration rate of the root + soil system by 16%, inducing an extra C flow amounting to 3% of daily gross photosynthesis. Total C flow into AMF growth and respiration was estimated at < 8% of daily gross photosynthesis. This was associated with a greater amount of new C allocated belowground and respired in mycorrhizal plants. AMF colonization affected the sources supplying belowground respiration, indicating a greater importance of plant C stores in supplying respiration and/or the participation of storage pools within fungal tissues. When ontogenetic and nutritional effects were accounted for, AMF increased belowground C costs, which were not compensated by increased photosynthesis rates. Therefore the instantaneous relative growth rate was lower in mycorrhizal plants.