Azoarcus sp. strain BH72, a mutualistic endophyte of rice and other grasses, is of agrobiotechnological interest because it supplies biologically fixed nitrogen to its host and colonizes plants in remarkably high numbers without eliciting disease symptoms. The complete genome sequence is 4,376,040-bp long and contains 3,992 predicted protein-coding sequences. Genome comparison with the Azoarcus-related soil bacterium strain EbN1 revealed a surprisingly low degree of synteny. Coding sequences involved in the synthesis of surface components potentially important for plant-microbe interactions were more closely related to those of plant-associated bacteria. Strain BH72 appears to be 'disarmed' compared to plant pathogens, having only a few enzymes that degrade plant cell walls; it lacks type III and IV secretion systems, related toxins and an N-acyl homoserine lactones-based communication system. The genome contains remarkably few mobile elements, indicating a low rate of recent gene transfer that is presumably due to adaptation to a stable, low-stress microenvironment.