The fungal grass endophyteEpichloë typhina(Pers.) Tul. & C. Tul. (Ascomycota: Clavicipitaceae) grows intercellulary in aerial plant parts and reproduces asexually by invading host seeds. In this phase, it enhances seed production and germination, which accelerates its vertical spread. This relationship may be distorted by other seed-born fungi, whose spread is not so directly dependent on the success of the grass. Recently, the fungusClonostachys epichloëSchroers has been observed onPuccinellia distans(Jacq.) Parl seeds originating from grass clumps infested with stromata, sexual structures ofEpichloë typhinathat are formed in spring on some host culms, preventing flower and seed development (‘choke disease’).C. epichloëshows mycoparasitic activity towardEpichloëstromata by reducing the production of ascospores, which are responsible for horizontal transmission of the fungus. The aim of this study was to investigate the effect of seed-borneC. epichloëon seed germination, as well as the size and weight ofP. distansseedlings and to examine whetherC. epichloëalters the influence ofEpichloëin the early developmental stages ofP. distans. The results showed that ifC. epichloëacts on seeds together withE. typhinaendophytes, the seeds were negatively affected due to the elimination of the positive effect of the latter in terms of both seed germination rate and seedling length. At the same time,C. epichloëincreased the proportion ofE. typhina-untreated germinated seeds. Additionally, only the joint action of the two fungi,E. typhinaandC. epichloë,effectively stimulated seedling dry mass; the presence ofE. typhinaalone was not sufficient to noticeably affect seedling size. Based on the increasing commonality ofC. epichloëonEpichloëstromata, as well as its potential to be used in biocontrol of ‘choke disease’, we should take a closer look at this fungus, not only in terms of its mycoparasitic ability, but also in terms of its cumulative impact on the wholeEpichloë-grass system.