The Gram-negative bacterium Xanthomonas oryzae pv. oryzicola (Xoc) is the causal agent of rice bacterial leaf streak (BLS), one of the most destructive diseases of rice (Oryza sativa L.) that is the important staple crop. Xoc can invade host leaves via stomata and wounds and its type three secretion system (T3SS) is pivotal to its pathogenic lifestyle. In this study, using a novel dual RNA-seq approach, we examined transcriptomes of rice and Xoc in samples inoculated with wild type Xoc GX01 and its T3SS defective strain (T3SD), to investigate the global transcriptional changes in both organisms. Compared with T3SD strain, rice inoculated with wild type Xoc GX01 resulted in significant expression changes of a series of plant defence related genes, including ones altered in plant signalling pathway, and downregulated in phenylalanine metabolism, flavonoid and momilactone biosynthesis, suggesting repression of plant defence response and reduction in both callose deposition and phytoalexin accumulation. Also, some known transcription activator-like effector (TALE) targets were induced by Xoc GX01, e.g. OsSultr3;6 which contributes to rice susceptibility. Some cell elongation related genes, including several expansin genes, were induced by GX01 too, suggesting that Xoc may exploit this pathway to weaken cell wall strength, beneficial for bacterial infection. On the other hand, compared with wild type, the T3SD strain transcriptome in planta was characterized by downregulation of ATP, protein and polysaccharide synthesis, and upregulation of antioxidation and detoxification related genes, revealing that T3SD strain faced serious starvation and oxidation stresses in planta without a functional T3SS. In addition, comparative global transcript profiles of Xoc in planta and in medium revealed an upregulation of virulence factor synthesis and secretion in planta in favour of bacterial infection. Collectively, this study provides a comprehensive representation of cross talk between the host and bacterial pathogen, revealing insights into the Xoc-rice pathogenic dynamic and reveals novel strategies exploited by this important pathogen to cause disease.