Endophytes, both of bacterial and fungal origin, are ubiquitously present in all plants. While their origin and evolution are enigmatic, there is burgeoning literature on their role in promoting growth and stress responses in their hosts. We demonstrate that a salt-tolerant endophyte isolated from salt-adapted Pokkali rice, a Fusarium sp., colonizes the salt-sensitive rice variety IR-64, promotes its growth under salt stress and confers salinity stress tolerance to its host. Physiological parameters, such as assimilation rate and chlorophyll stability index were higher in the colonized plants. Comparative transcriptome analysis revealed 1348 up-regulated and 1078 down-regulated genes in plants colonized by the endophyte. Analysis of the regulated genes by MapMan and interaction network programs showed that they are involved in both abiotic and biotic stress tolerance, and code for proteins involved in signal perception (leucine-rich repeat proteins, receptor-like kinases) and transduction (ca 2+ and calmodulin-binding proteins), transcription factors, secondary metabolism and oxidative stress scavenging. For nine genes, the data were validated by qPCR analysis in both roots and shoots. Taken together, these results show that salt-adapted Pokkali rice varieties are powerful sources for the identification of novel endophytes, which can be used to confer salinity tolerance to agriculturally important, but salt-sensitive rice varieties. Salinity stress is one of the most devastating abiotic stresses that affect growth, development and productivity of major crops. A soil is termed saline if its osmotic pressure is approximately 0.2 M Pa with an electrical conductivity of 4 dS/m or more (equivalent to ~40 mM NaCl) 1,2. It is estimated that at least 50% of the arable land worldwide will be salt affected by the year 2050 and this is expected to further increase due to global climate change 3. Rice (Oryza sativa L.), a major staple food crop, is one of the most salt-sensitive cereals 4. In the Indo-Gangetic Basin in India, an estimated 45% loss in rice production was attributed to salinity stress alone 5,6. The responses of plants to salinity stress are often multi-faceted and complex. In the initial phase, salinity stress manifests itself as osmotic stress with reduction in water uptake by plants. This triggers a range of metabolic and molecular cascades such as inhibition of cell expansion, stomatal conductance, photosynthetic activity, abscisic acid (ABA)-mediated responses followed by stimulation of the SOD and peroxidase activities as well as accumulation of osmolytes like proline. The later phase of salinity stress leads to ionic stress, which is due to the