Author Summary The fungal family, Clavicipitaceae, includes “ergot” fungi that parasitize ears of cereals and have historically caused mass poisonings, as well as “epichloae,” which are symbionts of grasses. Many epichloae are mutualistic symbionts, but some are pathogenic, and others have both mutualistic and pathogenic characteristics. Most Clavicipitaceae produce “alkaloids,” small molecules that deter insects, livestock, and wildlife from feeding on the fungus or plant. Epichloae protect their hosts with diverse alkaloids belonging to four chemical classes. After sequencing the entire DNA contents (“genomes”) of ten epichloae, three ergot fungi, and two relatives, we compared their “clusters” of genes for alkaloid biosynthesis. In the epichloae, these clusters contained extraordinarily large blocks of highly repetitive DNA, which promote gene losses, mutations, and even the evolution of new genes. These repeat blocks account for the exceptionally high alkaloid diversity in the epichloae and may relate to the ecological diversity of these symbiotic fungi.