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Miniature inverted-repeat transposable elements (MITEs) are abundant repeat elements in plant and animal genomes; however, there are few analyses of these elements in fungal genomes. Analysis of the draft genome sequence of the fungal endophyte Epichloë festucae revealed 13 MITE families that make up almost 1% of the E. festucae genome, and relics of putative autonomous parent elements were identified for three families. Sequence and DNA hybridization analyses suggest that at least some of the MITEs identified in the study were active early in the evolution of Epichloë but are not found in closely related genera. Analysis of MITE integration sites showed that these elements have a moderate integration site preference for 5' genic regions of the E. festucae genome and are particularly enriched near genes for secondary metabolism. Copies of the EFT-3m/Toru element appear to have mediated recombination events that may have abolished synthesis of two fungal alkaloids in different epichloae. This work provides insight into the potential impact of MITEs on epichloae evolution and provides a foundation for analysis in other fungal genomes.

Abundant Degenerate Miniature Inverted-Repeat Transposable Elements in Genomes of Epichloid Fungal Endophytes of Grasses