Because of their beneficial impact on plants, the highly diverse mycorrhizal fungi grouped in the order Sebacinales lay claim to high ecological and agricultural significance. Here, we describe for the first time associations of Sebacinoid members with bacteria. Using quantitative PCR, denaturating gradient gel electrophoresis and fluorescence in situ hybridization, we detected an intimate association between Piriformospora indica and Rhizobium radiobacter, an alpha-Proteobacterium. The stability of the association, vertical transmission of the bacteria during asexual fungal reproduction and fungal plant colonization was monitored using R. radiobacter-specific primers. Treatment of mycelium or fungal protoplasts with antibiotics highly efficient against the free bacteria failed to cure the fungus. Barley seedlings dip-inoculated with R. radiobacter showed growth promotion and systemic resistance to the powdery mildew fungus Blumeria graminis comparable to P. indica inoculation. By screening additional isolates of the Sebacina vermifera complex, three species-specific associations with bacteria from the genera Paenibacillus, Acinetobacter and Rhodococcus were found. These findings suggest that Sebacinales species regularly undergo complex interactions involving host plants and bacteria reminiscent of other ectomycorrhizal and endomycorrhizal associations.