To study the possibility of utilizing genetically engineered Leifsonia xyli subsp. cynodontis (Lxc) as an endophytic bacterium in rice, we constructed an Escherichia coli-Lxc shuttle vector, pLGUS, containing a beta-glucuronidase reporter gene, which was stable both in vitro and in vivo. Lxc grows and expresses the beta-glucuronidase reporter gene in all parts of rice, except for seed. A 2-year field study using three rice varieties from China showed that Lxc inoculation did not have a negative effect on the growth and yield of any of these varieties. Therefore, Lxc has the potential to be used as a benign endophyte for the expression of foreign genes in rice.