Eight bacterial isolates from the larval guts of Diamondback moths (Plutella xylostella) were tested for their plant growth-promoting (PGP) traits and effects on early plant growth. All of the strains tested positive for nitrogen fixation and indole 3-acetic acid (IAA) and salicylic acid production but negative for hydrogen cyanide and pectinase production. In addition, five of the isolates exhibited significant levels of tricalcium phosphate and zinc oxide solubilization; six isolates were able to oxidize sulfur in growth media; and four isolates tested positive for chitinase and beta-1,3-glucanase activities. Based on their IAA production, six strains including four that were 1-aminocyclopropane-1-carboxylate (ACC) deaminase positive and two that were ACC deaminase negative were tested for PGP activity on the early growth of canola and tomato seeds under gnotobiotic conditions. Acinetobacter sp. PSGB04 significantly increased root length (41%), seedling vigor, and dry biomass (30%) of the canola test plants, whereas Pseudomonas sp. PRGB06 inhibited the mycelial growth of Botrytis cinerea, Colletotrichum coccodes, C. gleospoiroides, Rhizoctonia solani, and Sclerotia sclerotiorum under in vitro conditions. A significant increase, greater than that of the control, was also noted for growth parameters of the tomato test plants when the seeds were treated with PRGB06. Therefore, the results of the present study suggest that bacteria associated with insect larval guts possess PGP traits and positively influence plant growth. Therefore, insect gut bacteria as effective PGP agents represent an unexplored niche and may broaden the spectrum of beneficial bacteria available for crop production.