Following inoculation with Azorhizobium caulinodans ORS571 (pXLGD4), lateral root development of rice and colonization of lateral root cracks by bacteria were shown to be stimulated by the flavonoid naringenin. Rice seedlings growing aseptically in the presence of naringenin were inoculated with ORS571 (pXLGD4), carrying the lacZ reporter gene. By microscopic analysis of sections of inoculated rice roots, it has been demonstrated that the xylem of rice roots can be colonized by Azorhizobium caulinodans. We discuss whether this colonization of the xylem of rice roots by azorhizobia could provide a suitable niche for endophytic nitrogen fixation.