Phytohormones are regulators of plant growth and development, which under different types of stress can play a fundamental role in a plant’s adaptation and survival. Some of these phytohormones such as cytokinin, gibberellin, salicylic acid, auxin, and ethylene are also produced by plant growth-promoting bacteria (PGPB). In addition, numerous volatile organic compounds are released by PGPB and, like bacterial phytohormones, modulate plant physiology and genetics. In the present work we review the basic functions of these bacterial phytohormones during their interaction with different plant species. Moreover, we discuss the most recent advances of the beneficial effects on plant growth of the phytohormones produced by PGPB. Finally, we review some aspects of the cross-link between phytohormone production and other plant growth promotion (PGP) mechanisms. This work highlights the most recent advances in the essential functions performed by bacterial phytohormones and their potential application in agricultural production.