In most legume nodules, the N2-fixing rhizobia are present as organelle-like structures inside their host cells. These structures, named symbiosomes, contain one or a few rhizobia surrounded by a plant membrane. Symbiosome formation requires the release of bacteria from cell-wall-bound infection threads. In primitive legumes, rhizobia are hosted in intracellular infection threads that, in contrast to symbiosomes, are bound by a cell wall. The formation of symbiosomes is presumed to represent a major step in the evolution of legume-nodule symbiosis, because symbiosomes facilitate the exchange of metabolites between the two symbionts. Here, we show that the genes, which are essential for initiating nodule formation, are also actively transcribed in mature Medicago truncatula nodules in the region where symbiosome formation occurs. At least one of these genes, encoding the receptor kinase DOES NOT MAKE INFECTIONS 2 (DMI2) is essential for symbiosome formation. The protein locates to the host cell plasma membrane and to the membrane surrounding the infection threads. A partial reduction of DMI2 expression causes a phenotype that resembles the infection structures found in primitive legume nodules, because infected cells are occupied by large intracellular infection threads instead of by organelle-like symbiosomes.