The Alphaproteobacterium Rhizobium radiobacter F4 (RrF4) was originally characterized as an endofungal bacterium in the beneficial endophytic Sebacinalean fungus Piriformospora indica. Although attempts to cure P. indica from RrF4 repeatedly failed, the bacterium can easily be grown in pure culture. Here, we report on RrF4’s genome and the beneficial impact the free-living bacterium has on plants. In contrast to other endofungal bacteria, the genome size of RrF4 is not reduced. Instead, it shows a high degree of similarity to the plant pathogenic R. radiobacter (formerly: Agrobacterium tumefaciens) C58, except vibrant differences in both the tumor-inducing (pTi) and the accessor (pAt) plasmids, which can explain the loss of RrF4’s pathogenicity. Similar to its fungal host, RrF4 colonizes plant roots without host preference and forms aggregates of attached cells and dense biofilms at the root surface of maturation zones. RrF4-colonized plants show increased biomass and enhanced resistance against bacterial leaf pathogens. Mutational analysis showed that, similar to P. indica, resistance mediated by RrF4 was dependent on the plant’s jasmonate-based induced systemic resistance (ISR) pathway. Consistent with this, RrF4- and P. indica-induced pattern of defense gene expression were similar. In clear contrast to P. indica, but similar to plant growth-promoting rhizobacteria, RrF4 colonized not only the root outer cortex but also spread beyond the endodermis into the stele. On the basis of our findings, RrF4 is an efficient plant growth-promoting bacterium.