An endophytic Streptomyces sp. GMKU 3100 isolated from roots of a Thai jasmine rice plant (Oryza sativa L. cv. KDML105) showed the highest siderophore production on CAS agar while phosphate solubilization and IAA production were not detected. A mutant of Streptomyces sp. GMKU 3100 deficient in just one of the plant growth promoting traits, siderophore production, was generated by inactivation of a desD-like gene encoding a key enzyme controlling the final step of siderophore biosynthesis. Pot culture experiments revealed that rice and mungbean plants inoculated with the wild type gave the best enhancement of plant growth and significantly increased root and shoot biomass and lengths compared with untreated controls and siderophore-deficient mutant treatments. Application of the wild type in the presence or absence of ferric citrate significantly promoted plant growth of both plants. The siderophore-deficient mutant clearly showed the effect of this important trait involved in plant-microbe interaction in enhancement of growth in rice and mungbean plants supplied with sequestered iron. Our results highlight the value of a substantial understanding of the relationship of the plant growth promoting properties of endophytic actinomycetes to the plants. Endophytic actinomycetes, therefore, can be applied as potentially safe and environmentally friendly biofertilizers in agriculture.