Background and Aims <p>Temperate forage grasses form specific symbiotic relationships with <i>Epichloë</i> spp. fungal endophytes. While this symbiosis is known to enhance drought tolerance, its effect under waterlogging—a common stressor in rainfed agroecosystem—remains uncertain. This study investigates the ecophysiological mechanisms by which the <i>Lolium multiflorum</i>–<i>E. occultans</i> symbiosis influences drought and waterlogging tolerance strategies, both during the stress period and the subsequent recovery phase.</p> Methods <p>Using the dual isotope (¹³C/¹²C and ¹⁸O/¹⁶O) concept, we analyzed the physiological responses of&#xa0;<i>L. multiflorum</i> plants with and without <i>Epichloë</i> under severe drought or waterlogging, relative to well-watered control conditions (field capacity) for 28&#xa0;days, followed by a 20-day recovery period. We assessed changes in stomatal conductance (inferred via δ¹⁸Ocel_cel), intrinsic water-use efficiency (iWUE), photosynthesis levels, specific tiller production, and specific root growth.</p> Results <p><i>Epichloë</i>-symbiotic plants exhibited increased stomatal conductance while maintaining stable iWUE levels. This combination suggests a higher CO₂ assimilation rate, leading to increased photosynthesis levels. Additionally, symbiotic plants showed greater specific tiller production and root growth. During the recovery phase, they maintained superior tiller growth, indicating a role of <i>Epichloë</i> in carbon allocation and post-stress regrowth.</p> Conclusion <p>The symbiotic association with <i>Epichloë</i> enhances physiological and morphological responses to water stress, improving plant resilience to extreme moisture conditions. These findings highlight the ecological significance of fungal symbiosis in temperate forage grasses, contributing to improved stress tolerance in natural and agricultural ecosystems.</p>