Methylobacterium spp. bacteria occur commonly in the environment. The presence of some methylobacteria in the soil/plant have positive effect to the plants growth and can reduce or prevent the consequence of phytopathogens. We determined the effect of M. oryzae CBMB20 (rice endosymbiont) on different stages of Arabidopsis thaliana and Solanum lycopersicum development. Protective properties against phytopathogenic bacteria of M. oryzae CBMB20 lipopolysaccharide were also determined. High resolution mass spectrometry was used to confirm presence of IAA in tomato extracts. Based on the obtained results we concluded that, M. oryzae CBMB20 had no significant effect on the germination percentage of both plants but increased the number of root hairs in A. thaliana and the length of S. lycopersicum sprouts and led to an increase in the fresh weight of the plants. LPS CBMB20 was able to strengthen a defence reaction in response to the presence of the phytopathogen. S. lycopersicum, treated with CBMB20, produced more IAA than plants that were not treated with the methylobacteria, which translates into an increase in fresh mass. These findings suggest that M. oryzae CBMB20 has potential as a component of biopreparations.