Field experiments were conducted in three consecutive years to determine the effect of Dilophospora alopecuri inoculation on the incidence of galls with Rathayibacter toxicus in annual ryegrass (Lolium rigidum). R. toxicus is carried into the grass by the seed gall nematode, Anguina funesta, and colonizes the ovules, displacing the nematodes, and producing the toxin responsible for annual ryegrass toxicity. Treatments included three types of D. alopecuri inoculum (naturally colonized ryegrass, cultures grown on sterilized wheat grain, and spore Suspension) applied at different application rates and times. In the first year, naturally colonized ryegrass (30 kg ha(-1)), applied 1 week after the break of season, colonized wheat grain (150 kg ha(-1)) applied once at 1, 4, or 8 weeks or applied three times at 1, 4, and 8 weeks after the break of season, and spore suspension at heading, all significantly reduced the numbers of bacterially colonized galls (by 85 to 96%). In the second and third years, inoculum was applied at various rates and times. There were no significant treatment effects in the second year. In the third year, colonized wheat (450 kg ha(-1)) reduced the number of bacterially colonized galls by 73% and there was a significant negative relationship between inoculation rate of colonized wheat (5.5 to 450 kg ha-1) and the number of bacterially colonized galls (r = 0.86, P < 0.01). D. alopecuri has potential as a biopesticide for the management of annual ryegrass toxicity, but efficacy could be highly variable depending upon season or site, and uneconomic application rates might be needed.