Intercellular hyphae of Cladorrhinum foecundissimum were observed in a dense layer surrounding the stele of cotton roots and were distinguished inside root hairs of plants grown in substrate containing the endophyte. No damage was observed in the epidermis of roots from infested substrate. At the blossom stage height of plants grown in substrate with the endophyte was 50% greater than in the controls. In the same group of plants growing in phosphorus-deficient substrate the endophyte doubled the phosphorus concentration compared to the control plants. In 25 day-old plants growing in substrate with high phosphorus content, the use of 32P showed a L value [available P (mg P 100 g−1)] 29% greater in soil colonized by the endophyte than in the non-infested substrate, but dry matter and phosphorus content in plants were not significantly different.