Bacterial-fungal interactions are pervasive in the rhizosphere. While an increasing number of endohyphal bacteria (EHB) have been identified, little is known about their ecology and impact on the associated fungal hosts and the surrounding environment. In this study, we characterized the genome of anEnterobactersp. (En-Cren) isolated from the generalist fungal pathogenRhizoctonia solani. Overall, the En-Cren genome size was typical for members of the genus and was capable of free-living growth. The genome was 4.6 MB in size, and no plasmids were detected. Several prophage regions and genomic islands were identified that harbor unique genes in comparison with phylogenetically closely relatedEnterobacterspp. Type VI secretion system and cyanate assimilation genes were identified from the bacterium, while common heavy metal resistance genes were absent. En-Cren contains the key genes for indole-3-acetic acid (IAA) and phenylacetic acid (PAA) biosynthesis, and produces IAA and PAAin vitro, which may impact the ecology or pathogenicity of the fungal pathogenin vivo. En-Cren was observed to move along hyphae ofR. solaniand on other basidiomycetes and ascomycetes in culture. The bacterial flagellum is essential for hyphal movement, while other pathways and genes may also be involved.