Endophytic fungi are thought to interact mutualistically with host plants by producing alkaloid metabolites that deter herbivory. Since such fungi are transmitted via seed in some grasses, the presence of endophytes may also protect plants from seed predators. We conducted seed choice experiments for two dominant seed harvesting ants, Pogonomyrmex rugosus in the Sonoran desert and Pogonomyrmex occidentalis at a higher elevation, riparian zone in Arizona, USA. Non-infected fescue (Festuca arundinacea) seeds and seeds infected with the endophytic fungus, Acremonium coenophialum, were presented to ant colonies in three different populations. Infected seeds were harvested less frequently than non-infected seed for the two populations of Pogonomyrmex rugosus but not for the population of Pogonomyrmex occidentalis. We also a conducted seed dispersal experiment for one population of Pogonomyrmex rugosus. Of the seeds that were harvested, most of the colonies discarded more infected seeds into refuse piles than expected by chance. Seeds discarded into refuse piles have greater germination success than surrounding areas. The most important interaction of endophytes and grasses may be deterrence of seed predation and enhancing the probability of germinating in favorable sites, since these processes directly increase plant fitness.