Hubbard, M., Germida, J. J. and Vujanovic, V. 2014. Fungal endophyte colonization coincides with altered DNA methylation in drought-stressed wheat seedlings. Can. J. Plant Sci. 94: 223-234. Drought stress is one of the greatest limiting factors to Canadian agricultural production. The endophytic fungus SMCD 2206 improves wheat tolerance for drought. However, the mechanism(s) by which this mycobiont interacts with its host are not known. Methyl-sensitive amplified polymorphism (MSAP) was used to test the hypothesis that the endophyte colonization is associated with epigenetic modifications in drought-stressed wheat. Such epigenetic changes might be linked to elevated plant drought resistance. The DNA methylation patterns observed in drought-stressed wheat seedlings co-cultured with SMCD 2206 resembled those of unstressed controls (with or without the endophyte) much more closely than those of endophyte-free, drought-stressed plants. Consistent with the documented roles of transposable elements in plant epigenetics, DNA sequences isolated from some of the most prominent polymorphic MSAP bands were similar to a CACTA type transposon and two retrotransposons of Gypsy and Copia types. Another polymorphic band was similar to a wheat cytochrome p450 expressed sequence tag, suggesting that inoculation may be linked to altered plant responses to oxidative stress in drought conditions. These findings shed new light on the mechanisms involved in plant-endophyte associations, showing that SMCD 2206 colonization of wheat coincides with epigenetic differences in the plant host.