Cyanobacteria-rice plant interactions were analyzed using a hydroponics experiment. The activity of plant defense and pathogenesis-related enzymes, scanning electron microscopy, growth, nitrogen fixation (measured as ARA), and DNA fingerprinting assays proved useful in illustrating the nature of associations of cyanobacteria with rice plants. Microscopic analyses revealed the presence of short filaments and coiled masses of filaments of cyanobacteria near the epidermis and cortex of roots and shoot tissues. Among the six cyanobacterial strains employed, Calothrix sp. (RPC1), Anabaena laxa (RPAN8), and Anabaena azollae (C16) were the best performing strains, in terms of colonization in roots and stem. These strains also enhanced nitrogen fixation and stimulated the activity of plant defense/cell wall-degrading enzymes. A significantly high correlation was also recorded between the elicited plant enzymes, growth, and ARA. DNA fingerprinting using highly iterated palindromic sequences (HIP-TG) further helped in proving the establishment of inoculated organisms in the roots/shoots of rice plants. This study illustrated that the colonization of cyanobacteria in the plant tissues is facilitated by increased elicitation of plant enzymes, leading to improved plant growth, nutrient mobilization, and enhanced plant fitness. Such strains can be promising candidates for developing "cyanobacteria colonized-nitrogen-fixing rice plants" in the future.