Ralstonia solanacearum is a globally distributed soil-borne plant pathogenic bacterium, which shares a broad ecological range with many plant- and soil-associated fungi. We sought to determine if R. solanacearum chemical communication directs symbiotic development of polymicrobial consortia. R. solanacearum produced a diffusible metabolite that induced conserved morphological differentiation in 34 species of fungi across three diverse taxa (Ascomycetes, Basidiomycetes and Zygomycetes). Fungi exposed to this metabolite formed chlamydospores, survival structures with thickened cell walls. Some chlamydospores internally harbored R. solanacearum, indicating a newly described endofungal lifestyle for this important plant pathogen. Using imaging mass spectrometry and peptidogenomics, we identified an undescribed lipopeptide, ralsolamycin, produced by an R. solanacearum non-ribosomal peptide synthetase-polyketide synthase hybrid. Inactivation of the hybrid non-ribosomal peptide synthetase-polyketide synthase gene, rmyA, abolished ralsolamycin synthesis. R. solanacearum mutants lacking ralsolamycin no longer induced chlamydospore development in fungal coculture and invaded fungal hyphae less well than wild-type. We propose that ralsolamycin contributes to the invasion of fungal hyphae and that the formation of chlamydospores may provide not only a specific niche for bacterial colonization but also enhanced survival for the partnering fungus.