We studied genetic variability of 100 isolates of Claviceps purpurea by using randomly amplified polymorphic DNA (RAPD), an EcoRI restriction site polymorphism in the 5.8S ribosomal DNA (rDNA), the alkaloids produced, and conidial morphology. We identified three groups: (i) group G1 from fields and open meadows (57 isolates), (ii) group G2 from shady or wet habitats (41 isolates), and (iii) group G3 from Spartina anglica from salt marshes (2 isolates). The sclerotia of G1 isolates contained ergotamines and ergotoxines; G2 isolates produced ergosine and ergocristine along with small amounts of ergocryptine; and G3 isolates produced ergocristine and ergocryptine. The conidia of G1 isolates were 5 to 8 µm long, the conidia of G2 isolates were 7 to 10 µm long, and the conidia of G3 isolates were 10 to 12 µm long. Sclerotia of the G2 and G3 isolates floated on water. In the 5.8S rDNA analysis, an EcoRI site was found in G1 and G3 isolates but not in G2 isolates. The host preferences of the groups were not absolute, and there were host genera that were common to both G1 and G2; the presence of members of different groups in the same locality was rare. Without the use of RAPD or rDNA polymorphism, it was not possible to distinguish the three groups solely on the basis of phenotype, host, or habitat. In general, populations of C. purpurea are not host specialized, as previously assumed, but they are habitat specialized, and collecting strategies and toxin risk assessments should be changed to reflect this paradigm shift.