Plant growth-promoting bacteria (PGB) induce positive effects in plants, for instance, increased growth and reduced abiotic stresses susceptibility. The mechanisms by which these bacteria impact the host plant are numerous, diverse and often specific. Here, we studied the agronomical, molecular and biochemical effects of the endophytic PGB Bacillus subtilis B26 on the full life cycle of Brachypodium distachyon Bd21, an established model species for functional genomics in cereal crops and temperate grasses. Inoculation of Brachypodium with B. subtilis strain B26 increased root and shoot weights, accelerated growth rate and seed yield as compared to control plants. B. subtilis strain B26 efficiently colonized the plant and was recovered from roots, stems and blades as well as seeds of Brachypodium, indicating that the bacterium is able to migrate, spread systemically inside the plant, establish itself in the aerial plant tissues and organs, and is vertically transmitted to seeds. The presence of B. subtilis strain B26 in the seed led to systemic colonization of the next generation of Brachypodium plants. Inoculated Brachypodium seedlings and mature plants exposed to acute and chronic drought stress minimized the phenotypic effect of drought compared to plants not harbouring the bacterium. Protection from the inhibitory effects of drought by the bacterium was linked to upregulation of the drought-response genes, DREB2B-like, DHN3-like and LEA-14-A-like and modulation of the DNA methylation genes, MET1B-like, CMT3-like and DRM2-like, that regulate the process. Additionally, total soluble sugars and starch contents increased in stressed inoculated plants, a biochemical indication of drought tolerance. In conclusion, we show a single inoculation of Brachypodium with a PGB affected the whole growth cycle of the plant, accelerating its growth rates, shortening its vegetative period, and alleviating drought stress effects. These effects are relevant to grasses and cereal crops.