However some endophytic bacteria exert several beneficial effects on host plants, such as stimulation of plant growth, nitrogen fixation and induction of resistance to plants pathogens 6. Endophytes also promote the growth of plants, especially through secretion of plant growth regulators; e.g. indole-acetic acid, via phosphate-solubilizing activity, by supplying biologically fixed nitrogen. In addition, endophytic bacteria supply essential vitamins to plants 7. The production of auxin-like compounds increased shoot growth and tillering. Other effects of endophytes infection on the host plant include osmotic adjustment, stomatal regulation, modification of root morphology, enhanced uptake of minerals and alteration of nitrogen accumulation and metabolism 4, 8. The aims of this study were to isolate and characterize endophytic bacteria from various rice tissues focusing on their ability to produce indole acetic acid (IAA). This information will be used for further investigation on the feasibility of commercial production of IAA up-scale fermentation.