Cells of Enterobacter sp., a phosphate-solubilizing bacterium, were encapsulated in calcium-alginate beads supplemented with skim milk. Free-cell and encapsulated-cell formulations were introduced into a soil, amended with rock phosphate, to compare their effect on non-mycorrhizal and mycorrhizal Lactuca sativa plants. Bacterial inoculation affected plant growth and P uptake but encapsulated-cell formulation caused the better plant response. Combined inoculation of encapsulated cells and Glomus deserticola provided the best microbial inoculum and enhanced plant growth by 96% as compared to the uninoculated control. The higher number of bacterial cells (log 4.4 CFU/g soil) detected in soil inoculated with encapsulated cells stimulated the plant mycorrhization. The continuous flow of bacterial cells from the skim-milk-enriched carrier beads appeared to be the main reason for the enhanced plant growth and P uptake.