Endophytes are microorganisms that live within host plants for at least part of their life and do not cause apparent symptoms of diseases. In general, beneficial endophytes promote host plant growth, increase plant nutrient uptake, inhibit plant pathogen growth, reduce disease severity, and enhance tolerance to environmental stresses. As sustainable and renewable agricultural production (including current biofuel and bioenergy crops) increases in prominence, endophytic microorganisms will play important roles and offer environmentally-friendly methods to increase productivity while reducing chemical inputs. This review discusses various aspects of beneficial fungal and bacterial endophyte interactions with plants, including the physiological and molecular mechanisms by which they benefit plant performance. We also discuss the potential for genetic modification of endophytes with useful genes, which could be used to impart additional traits following inoculation with the genetically engineered endophytes. Finally, we review US-issued patents over the past decade which relate to the use of fungal and bacterial endophytes for plant growth and stress tolerance improvement.