The extent to which the N2-fixing bacterial endophyte Azoarcus sp. strain BH72 in the rhizosphere of Kallar grass can provide fixed nitrogen to the plant was assessed by evaluating inoculated plants grown in the greenhouse and uninoculated plants taken from the natural environment. The inoculum consisted of either wild-type bacteria or nifK¯ mutant strain BHNKD4. In N2-deficient conditions, plants inoculated with strain BH72 (N2-fixing test plants) grew better and accumulated more nitrogen with a lower δ15N signature after 8 months than did plants inoculated with the mutant strain (non-N2-fixing control plants). Polyadenylated or polymerase chain reaction-amplified BH72 nifH transcripts were retrieved from test but not from control plants. BH72 nifH transcripts were abundant. The inocula could not be reisolated. These results indicate that Azoarcus sp. BH72 can contribute combined N2 to the plant in an unculturable state. Abundant BH72 nifH transcripts were detected also in uninoculated plants taken from the natural environment, from which Azoarcus sp. BH72 also could not be isolated. Quantification of nitrogenase gene transcription indicated a high potential of strain BH72 for biological N2 fixation in association with roots. Phylogenetic analysis of nitrogenase sequences predicted that uncultured grass endophytes including Azoarcus spp. are ecologically dominant and play an important role in N2-fixation in natural grass ecosystems.