Green fluorescent protein (GFP), a renowned marker protein, is typically believed to be inert in affecting the physiology of host bacteria. We analyzed the effects of GFP-tagging on the ability of an endophytic diazotroph, Paenibacillus polymyxa P2b-2R, to fix nitrogen and promote overall growth of corn plants. The growth response and the amount of nitrogen fixed by P2b-2Rgfp-inoculated plants were compared with uninoculated controls and P2b-2R-inoculated plants at three harvests. P2b-2Rgfp inoculation significantly increased the biomass of corn plants as compared to non-inoculated controls and P2b-2R-treated plants. In vitro tests revealed that strains P2b-2R and P2b-2Rgfp possess various plant-growth-promoting characteristics, namely phosphate solubilization, production of siderophores, IAA, ammonia, and enzymes like cellulase, protease, and catalase. P2b-2Rgfp-inoculated plants fixed 18% atmospheric nitrogen, significantly higher than P2b-2R-inoculated plants (15%). This difference led us to compare the expression of structural nif genes (nifH, nifD, nifK) of strains P2b-2R and P2b-2Rgfp. It was observed that expression levels of structural nif genes of strain P2b-2Rgfp were 1.5-fold higher than those of strain P2b-2R. These results indicate that GFP-tagging positively affects the efficacy of strain P2b-2R to promote plant growth and fix nitrogen, perhaps by increasing the expression levels of structural nif genes.