Fungal endophytes in the tropical tree Theobroma cacao reduce damage from a major pathogen, Phytophthora sp. The study shows that endophytes, which are commonly found in the leaves of woody angiosperms, play an important but previously unappreciated role in host defense. Endophytes are horizontally transmitted and are diverse, with high diversity, spatial structure, and host affinity observed in T. cacao leaves in lowland Panama. Inoculation of endophyte-free leaves with endophytes isolated from naturally infected, asymptomatic hosts significantly reduces leaf necrosis and mortality when challenged with Phytophthora sp. Protection was primarily localized to endophyte-infected tissues, and was greater in mature leaves, which have less intrinsic defense against fungal pathogens. In vitro studies suggest that host affinity is mediated by leaf chemistry, and that protection may be mediated by direct interactions of endophytes with foliar pathogens. These findings demonstrate the capacity of diverse, horizontally transmitted endophytes to play an important role in host defense. The study also highlights the importance of endophytes in plant-pathogen interactions, and suggests that they may act as a form of horizontal immune system. The results provide evidence that endophytes can contribute to plant defense, and that their interactions with host plants are complex and influenced by factors such as leaf chemistry and host specificity. The study also shows that endophytes can be important in the ecological context of tropical forests, where they may contribute to the diversity and structure of plant communities. The findings have implications for sustainable agriculture and the management of plant diseases.Fungal endophytes in the tropical tree Theobroma cacao reduce damage from a major pathogen, Phytophthora sp. The study shows that endophytes, which are commonly found in the leaves of woody angiosperms, play an important but previously unappreciated role in host defense. Endophytes are horizontally transmitted and are diverse, with high diversity, spatial structure, and host affinity observed in T. cacao leaves in lowland Panama. Inoculation of endophyte-free leaves with endophytes isolated from naturally infected, asymptomatic hosts significantly reduces leaf necrosis and mortality when challenged with Phytophthora sp. Protection was primarily localized to endophyte-infected tissues, and was greater in mature leaves, which have less intrinsic defense against fungal pathogens. In vitro studies suggest that host affinity is mediated by leaf chemistry, and that protection may be mediated by direct interactions of endophytes with foliar pathogens. These findings demonstrate the capacity of diverse, horizontally transmitted endophytes to play an important role in host defense. The study also highlights the importance of endophytes in plant-pathogen interactions, and suggests that they may act as a form of horizontal immune system. The results provide evidence that endophytes can contribute to plant defense, and that their interactions with host plants are complex and influenced by factors such as leaf chemistry and host specificity. The study also shows that endophytes can be important in the ecological context of tropical forests, where they may contribute to the diversity and structure of plant communities. The findings have implications for sustainable agriculture and the management of plant diseases.