The systemic fungal endophytes of the genus Epichloë inhabit aerial part of host grasses. Recent studies have reported that Epichloë affects the non-systemic endophytic assemblages in live leaves, but there are few studies that have demonstrated the occurrence of Epichloë and its effect on fungal assemblages in dead leaves. We proposed a hypothesis that Epichloë decreases from live to dead leaves but affects the non-systemic endophytic assemblages also in dead leaves. To test this hypothesis, we sampled leaf sheaths from four leaf types (live, senescent, attached dead and fallen dead) of two native grass species Elymus racemifer and E. tsukushiensis var. transiens in Japan and assessed for fungi by DNA metabarcoding of the fungal ITS1 region. The occurrence of Epichloë OTU was significantly greater in E. tsukushiensis var. transiens than in E. racemifer and varied significantly between the four leaf types, with decreased and no detections in attached dead and fallen dead leaves, respectively. The composition of non-systemic fungal assemblages was also significantly affected by the presence/absence of Epichloë OTU, leaf type, host grass species and their interactions. These results supported our hypothesis that Epichloë decreases from live to dead leaves but affects the non-systemic endophytic assemblages in dead leaves and suggest that Epichloë can indirectly lead to the changes in belowground processes such as litter decomposition by affecting saprotrophic fungi in dead leaves.