Background Perennial ryegrass is a highly heterozygous outbreeding grass species used for turf and forage production. Heterozygosity can affect de-Bruijn graph assembly making de novo transcriptome assembly of species such as perennial ryegrass challenging. Creating a reference transcriptome from a homozygous perennial ryegrass genotype can circumvent the challenge of heterozygosity. The goals of this study were to perform RNA-sequencing on multiple tissues from a highly inbred genotype to develop a reference transcriptome. This was complemented with RNA-sequencing of a highly heterozygous genotype for SNP calling. Result De novo transcriptome assembly of the inbred genotype created 185,833 transcripts with an average length of 830 base pairs. Within the inbred reference transcriptome 78,560 predicted open reading frames were found of which 24,434 were predicted as complete. Functional annotation found 50,890 transcripts with a BLASTp hit from the Swiss-Prot non-redundant database, 58,941 transcripts with a Pfam protein domain and 1,151 transcripts encoding putative secreted peptides. To evaluate the reference transcriptome we targeted the high-affinity K+ transporter gene family and found multiple orthologs. Using the longest unique open reading frames as the reference sequence, 64,242 single nucleotide polymorphisms were found. One thousand sixty one open reading frames from the inbred genotype contained heterozygous sites, confirming the high degree of homozygosity. Conclusion Our study has developed an annotated, comprehensive transcriptome reference for perennial ryegrass that can aid in determining genetic variation, expression analysis, genome annotation, and gene mapping.