Fifty-five bacterial isolates were obtained from surface-sterilized nodules of woody and shrub legumes growing in Ethiopia: Crotalaria spp., Indigofera spp., and Erythrina brucei, and the food legumes soybean and common bean. Based on partial 16S rRNA gene sequence analysis, the majority of the isolates were identified as Gram-negative bacteria belonging to the genera Achromobacter, Agrobacterium, Burkholderia, Cronobacter, Enterobacter, Mesorhizobium, Novosphingobium, Pantoea, Pseudomonas, Rahnella, Rhizobium, Serratia, and Variovorax. Seven isolates were Gram-positive bacteria belonging to the genera Bacillus, Paenibacillus, Planomicrobium, and Rhodococcus. Amplified fragment length polymorphism (AFLP) fingerprinting showed that each strain was genetically distinct. According to phylogenetic analysis of recA, glnII, rpoB, and 16S rRNA gene sequences, Rhizobium, Mesorhizobium, and Agrobacterium were further classified into six different genospecies: Agrobacterium spp., Agrobacterium radiobacter, Rhizobium sp., Rhizobium phaseoli, Mesorhizobium sp., and putative new Rhizobium species. The strains from R. phaseoli, Rhizobium sp. IAR30, and Mesorhizobium sp. ERR6 induced nodules on their host plants. The other strains did not form nodules on their original host. Nine endophytic bacterial strains representing seven genera, Agrobacterium, Burkholderia, Paenibacillus, Pantoea, Pseudomonas, Rhizobium, and Serratia, were found to colonize nodules of Crotalaria incana and common bean on co-inoculation with symbiotic rhizobia. Four endophytic Rhizobium and two Agrobacterium strains had identical nifH gene sequences with symbiotic Rhizobium strains, suggesting horizontal gene transfer. Most symbiotic and nonsymbiotic endophytic bacteria showed plant growth-promoting properties in vitro, which indicate their potential role in the promotion of plant growth when colonizing plant roots and the rhizosphere.