Yellows diseases, caused by phytopathogenic bacteria of the genus Phytoplasma, are a major threat to grapevines worldwide. Because conventional applications against this pathogen are inefficient and disease management is highly challenging, the use of beneficial bacteria has been suggested as a biocontrol solution. A Dyella-like bacterium (DLB), isolated from the Israeli insect vector of grapevine yellows (Hyalesthes obsoletus), was suggested to be an endophyte. To test this hypothesis, the bacterium was introduced by spraying the plant leaves, and it had no apparent phytotoxicity to grapevine. Fluorescent in situ hybridization analysis showed that DLB is colonizing grapevine phloem. Because phytoplasmas inhabit the same niche, DLB interactions with this phytopathogen were examined. When the isolate was introduced to phytoplasma-infected Chardonnay plantlets, morphological disease symptoms were markedly reduced. The mode of DLB action was then tested using bioinformatics and system biology tools. DLB genome analysis suggested that the ability to reduce phytoplasma symptoms is related to inhibition of the pathogenic bacterium. These results provide the first step in examining the potential of DLB as a biological control agent against phytoplasmas in grapevine and, possibly, other agricultural crops.