Endophytes are nonpathogenic plant-associated bacteria that can play an important role in plant vitality and may confer resistance to abiotic or biotic stress. The effects of 5 endophytic bacterial strains isolated from pepper plants showing 1-aminocyclopropane-1-carboxylate deaminase activity were studied in sweet pepper under in vitro conditions. Four of the strains tested showed production of indole acetic acid. Plant growth, osmotic potential, free proline content, and gene expression were monitored in leaves and roots under control and mild osmotic stress conditions. All indole acetate producers promoted growth in Capsicum annuum L. 'Ziegenhorn Bello', from which they were isolated. Osmotic stress caused an increase in the content of free proline in the leaves of both inoculated and noninoculated plants. Inoculated control plants also revealed higher proline levels in comparison with noninoculated control plants. Differential gene expression patterns of CaACCO, CaLTPI, CaSAR82A, and putative P5CR and P5CS genes during moderate stress were observed, depending on the bacterium applied. Inoculation with 2 bacterial strains, EZB4 and EZB8 (Arthrobacter sp. and Bacillus sp., respectively), resulted in a significantly reduced upregulation or even downregulation of the stress-inducible genes CaACCO and CaLTPI, as compared with the gene expression in noninoculated plants. This indicates that both strains reduced abiotic stress in pepper under the conditions tested.