Xylaria species are common endophytes in tropical plants. It is not known, however, whether transmission of Xylaria occurs horizontally or vertically, whether individual Xylaria strains have wide host ranges or are host-specific, or how they are dispersed. We compared frequency of Xylaria endophytes in leaves and seeds of two tree species in Puerto Rico, Casuarina equisetifolia (Australian pine) and Manilkara bidentata (ausubo). These trees were chosen because they differ markedly in morphology, habitat, distribution, and origin. In C. equisetifolia Xylaria was significantly more frequent in leaves than in seeds. Xylaria was isolated from seeds of trees in inland parks, but never from seeds of trees growing on beaches. This suggests that vertical transmission of Xylaria may be possible but is not necessary for infection. In M. bidentata, Xylaria was isolated from 97% of leaves but was never isolated from seeds, suggesting that transmission is entirely horizontal. Seedlings raised in a greenhouse far from other M. bidentata trees had a level of Xylaria infection as high as seedlings in the forest, suggesting that inocula can come from other sources and endophytic strains are not host-specific.