BackgroundGluconacetobacter diazotrophicus Pal5 is an endophytic diazotrophic bacterium that lives in association with sugarcane plants. It has important biotechnological features such as nitrogen fixation, plant growth promotion, sugar metabolism pathways, secretion of organic acids, synthesis of auxin and the occurrence of bacteriocins.ResultsGluconacetobacter diazotrophicus Pal5 is the third diazotrophic endophytic bacterium to be completely sequenced. Its genome is composed of a 3.9 Mb chromosome and 2 plasmids of 16.6 and 38.8 kb, respectively. We annotated 3,938 coding sequences which reveal several characteristics related to the endophytic lifestyle such as nitrogen fixation, plant growth promotion, sugar metabolism, transport systems, synthesis of auxin and the occurrence of bacteriocins. Genomic analysis identified a core component of 894 genes shared with phylogenetically related bacteria. Gene clusters for gum-like polysaccharide biosynthesis, tad pilus, quorum sensing, for modulation of plant growth by indole acetic acid and mechanisms involved in tolerance to acidic conditions were identified and may be related to the sugarcane endophytic and plant-growth promoting traits of G. diazotrophicus. An accessory component of at least 851 genes distributed in genome islands was identified, and was most likely acquired by horizontal gene transfer. This portion of the genome has likely contributed to adaptation to the plant habitat.ConclusionThe genome data offer an important resource of information that can be used to manipulate plant/bacterium interactions with the aim of improving sugarcane crop production and other biotechnological applications.