Abstract
Fungi interact closely with bacteria, both on the surfaces of the hyphae and within their living tissues (i.e. endohyphal bacteria, EHB). These EHB can be obligate or facultative symbionts and can mediate diverse phenotypic traits in their hosts. Although EHB have been observed in many lineages of fungi, it remains unclear how widespread and general these associations are, and whether there are unifying ecological and genomic features can be found across EHB strains as a whole. We cultured 11 bacterial strains after they emerged from the hyphae of diverse Ascomycota that were isolated as foliar endophytes of cupressaceous trees, and generated nearly complete genome sequences for all. Unlike the genomes of largely obligate EHB, the genomes of these facultative EHB resembled those of closely related strains isolated from environmental sources. Although all analysed genomes encoded structures that could be used to interact with eukaryotic hosts, pathways previously implicated in maintenance and establishment of EHB symbiosis were not universally present across all strains. Independent isolation of two nearly identical pairs of strains from different classes of fungi, coupled with recent experimental evidence, suggests horizontal transfer of EHB across endophytic hosts. Given the potential for EHB to influence fungal phenotypes, these genomes could shed light on the mechanisms of plant growth promotion or stress mitigation by fungal endophytes during the symbiotic phase, as well as degradation of plant material during the saprotrophic phase. As such, these findings contribute to the illumination of a new dimension of functional biodiversity in fungi.