Bacterial endophytes are ubiquitous colonizers of the inner plant tissues where they do not normally cause any substantial morphological changes and disease symptoms. In this chapter, we will give an overview of which bacterial species can live as endophytes, and how they enter a plant and live inside. We will also describe various bacterial traits that are required for a successful colonization of the plant's interior by endophytes. Some endophytes can promote plant growth and/or protect their host against phytopathogens. Many mechanisms of their beneficial action are predicted, but we will focus on those for which experimental support in planta was reported. Genomic analysis can give a deeper insight into the capabilities of endophytes and their possible role in plant growth and health. We will end our chapter with a brief discussion of available postgenomic tools and their utility in understanding the functionality of endophytic bacteria in plants.