The effect of an endophytic fungus (Acremonium strictum) on plant-growth related parameters of marram grass (Ammophila arenaria), and its potential as a protective agent against root herbivores (Pratylenchus dunensis and Pratylenchus penetrans, root-lesion nematodes) was investigated in two inoculation experiments under different conditions. Acremonium strictum-inoculated plants showed increased plant development in terms of root biomass in the first experiment and increased number of tillers in the second experiment and biomass was less suppressed by nematodes than the Acremonium strictum-free plants. In neither experiment did Acremonium strictum reduce multiplication of root herbivores. On the contrary, Acremonium strictum-inoculated plants seemed to increase herbivore multiplication. Plants infected with P. penetrans benefitted more from the endophytic fungus than those with P. dunensis in terms of total biomass. The effect of Acremonium strictum on interspecific competition was also analyzed by plant inoculation with both nematode species. In Acremonium strictum-free plants with mixed nematode inoculum, the total number of nematodes, compared to numbers observed in one-species inoculation, was less than expected, suggesting that interspecific competition took place. In Acremonium strictum-inoculated plants no interspecific competition was observed. Plants inoculated with P. dunensis, P. penetrans and Acremonium strictum showed decreased total biomass compared to Acremonium strictum-free plants inoculated with the same nematodes. The implications of increased tillering and root growth of plants with Acremonium endophytes are discussed in relation to the sand stabilizing role of Ammophila arenaria in coastal dunes.