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The objective of the experiment was to examine the interaction of endophyte-infected tall fescue and environmental temperature on follicular and luteal development and function in beef heifers. Heifers were fed endophyte-free or endophyte-infected tall fescue seed at thermoneutral or heat stress temperatures (n = 6/treatment) 4 wk before and 3 wk after synchronized ovulation. All heifers were subjected to thermoneutral conditions (19 degrees C, 50% relative humidity) from Days -7 to -2; temperature increased incrementally from Days -1 to 0 and cycled between 25 degrees C and 31 degrees C between Days 1 and 20 for heat-stressed heifers. Serum was collected and ovaries monitored every other day after induced luteolysis between Days 1 and 23 or until ovulation. Size and location of follicles >4 mm and corpora lutea were recorded. Serum concentrations of prolactin were reduced in heat-stressed heifers fed infected seed and both heat stress and infected seed decreased total cholesterol. Rectal temperature and respiration rate were greatest in heifers fed the infected seed when exposed to maximal temperatures. Heat stress led to reduced diameter of the corpus luteum and serum progesterone compared with thermoneutral conditions. Progesterone was reduced more so in heifers fed infected seed. The combination of infected seed and heat stress was associated with reduced diameter of the preovulatory dominant follicle, and consumption of infected seed led to fewer large follicles during the estrous cycle. Both stressors led to reduced serum estradiol. Impaired follicle function may explain reduced pregnancy rates commonly observed in heifers grazing infected tall fescue pasture.