Fungal endophytes of the genus Neotyphodium are common in temperate pasture grass species and confer both beneficial and deleterious agronomic characteristics to their hosts. The aim of this study was to develop molecular markers based on simple sequence repeat (SSR) loci for the identification and assessment of genetic diversity among Neotyphodium endophytes in grasses. Expressed sequence tags (ESTs) from both Neptyphodium coenophialum and Neotyphodium lolii were examined, and unique SSR loci were identified in 9.7% of the N. coenophialum sequences and 6.3% of the N. lolii sequences. A variety of SSRs were present, although perfect trinucleotide repeat arrays were the most common. Primers were designed to 50 SSR loci from N. coenophialum and 57 SSR loci from N. lolii and were evaluated using 20 Neotyphodium and Epichloë isolates. A high proportion of the N. coenophialum and N. lolii primers produced amplification products from the majority of isolates and most of these primers detected genetic variation. SSR markers from both N. coenophialum and N. lolii detected high levels of polymorphism between Neotyphodium and Epichloë species, and low levels of polymorphism within N. coenophialum and N. lolii. SSR markers may be used in appropriate combinations to discriminate between species. Comparison with amplified fragment length polymorphism (AFLP) data demonstrated that the SSR markers were informative for the assessment of genetic variation within and between endophyte species. These markers may be used to identify endophyte taxa and to evaluate intraspecific population diversity, which may be correlated with variation for endophyte-derived agronomic traits.