Phenylalanine ammonia lyase (PAL) is important in the biosynthesis of plant secondary metabolites that regulate growth responses. Although its function is well-established in various plants, the functional significance of PAL genes in nodulation is poorly understood. Here, we demonstrate that the Lotus japonicus PAL (LjPAL1) gene is induced by Mesorhizobium loti infection and methyl-jasmonate (Me-JA) treatment in roots. LjPAL1 altered PAL activity, leading to changes in lignin contents and thicknesses of cell walls in roots and nodules of transgenic plants and, hence, to structural changes in roots and nodules. LjPAL1-knockdown plants (LjPAL1i) exhibited increased infection thread and nodule numbers and the induced upregulation of nodulin gene expression after M. loti infection. Conversely, LjPAL1 overexpression delayed the infection process and reduced infection thread and nodule numbers after M. loti inoculation. LjPAL1i plants also exhibited reduced endogenous salicylic acid (SA) accumulation and expression of the SA-dependent marker gene. Their infection phenotype could be partially restored by exogenous SA or Me-JA application. Our data demonstrate that LjPAL1 plays diverse roles in L. japonicus-rhizobium symbiosis, affecting rhizobial infection progress and nodule structure, likely by inducing lignin modification, regulating endogenous SA biosynthesis, and modulating SA signaling.