Sung & Spatafora (2007) Tolypocladium inflatum is an ascomycete fungus originally isolated from a Norwegian soil sample that, under certain conditions, produces the immunosuppressant drug ciclosporin.

[7] In 1971 the Austrian mycologist, Walter Gams, re-identified the isolate as a previously unknown microfungus affiliated with the order Hypocreales.

[8] The taxon is characterized by swollen phialides, sparingly branched conidiophores, and small, unicellular conidia borne in slimy heads.

[8] Canadian mycologist John Bissett re-examined the strain in 1983, finding it to match the species Pachybasium niveum, a fungus described prior to the work of Gams.

[8] The species is characterized by spherically swollen phialides that are terminated with narrow necks bearing subglobose conidia.

[9] In 1996, Kathie Hodge of Cornell University and colleagues determined that the mold T. inflatum was the asexual state of what was then known as Cordyceps subsessilis.

Tolypocladium inflatum is similar to other fungi in the order Hypocreales in generating a variety of biologically active secondary metabolites.

[10] Ciclosporin exhibits insecticidal and antifungal properties[10] and is a key immunosuppressant drug used to prevent the rejection of transplanted organs.

[10] In 2011, Linn and co-workers studied crude extracts of T. inflatum and found that the fungus produced six new secondary metabolites and four other chlamydosporol derivatives.

[13][16] Hodge and co-workers suggested that the fungus may have originated as an insect pathogen but evolved over time survive asexually as a facultative soil saprobe.

[15] Tolypocladium inflatum has long been of interest in biotechnology due to its production of a relatively non-cytotoxic, natural 11 amino acid[18] cyclic peptide[19] named Ciclosporin A.

[13] Ciclosporin A considerably alters the nuclear morphology of in vitro human peripheral blood mononuclear leukocytes from ovoid to a radially splayed lobulated structure.