Endophytic bacteria which are known to reside in plant tissues have often been shown to promote plant growth. Present study deals with the isolation of putative endophytes from the surface sterilized root nodules of pigeon pea (Cajanus cajan) designated as non-rhizobial (NR) isolates. Three of these non-rhizobial isolates called NR2, NR4 and NR6 showed plant growth promotion with respect to increase in plant fresh weight, chlorophyll content, nodule number and nodule fresh weight when co-inoculated with the rhizobial bioinoculant strain IC3123. The three isolates were neither able to nodulate C. cajan nor did they show significant plant growth promotion when inoculated alone without Rhizobium spp. IC3123. All the three isolates were gram positive rods with NR2 and NR4 showing endospore formation and formed one single cluster in Amplified Ribosomal DNA Restriction Analysis (ARDRA). Partial sequences of 16S rRNA genes of NR4 and NR6 showed 97% similarity to Bacillus megaterium. The Bacillus strains NR4 and NR6 were able to produce siderophores which the rhizobial bioinoculant IC3123 was able to cross-utilize. Under iron starved conditions IC3123 showed enhanced growth in the presence of the Bacillus isolates indicating that siderophore mediated interactions may be underlying mechanism of beneficial effect of the NR isolates on nodulation by IC3123. (C) 2007 Elsevier Ltd. All rights reserved.