Terpendole M (1), a novel indole-diterpenoid, was isolated from perennial ryegrass (Lolium perenne) infected with the endophytic fungus Neotyphodium lolii. It was identified as 14alpha-hydroxyterpendole C by NMR and mass spectral techniques. The known indole-diterpenoids paspaline (3) and 13-desoxypaxilline (4) were also isolated from perennial ryegrass for the first time. Terpendole M was less tremorgenic than terpendole C (2) in a standard mouse bioassay. These findings provide clues to the biogenesis of the lolitrem neurotoxins, and information on the structure-activity relationships within the indole-diterpenoids.