This study, framed in two different phases, studied the plant-growth promotion and the induction of systemic resistance in groundnut by Methylobacterium. Seed imbibition with Methylobacterium sp. increased germination by 19.5% compared with controls. Combined inoculation of Methylobacterium sp. with Rhizobium sp. also significantly increased plant growth, nodulation, and yield attributes in groundnut compared with individual inoculation of Rhizobium sp. Methylobacterium sp. challenge-inoculated with Aspergillus niger/Sclerotium rolfsii in groundnut significantly enhanced germination percentage and seedling vigour and showed increased phenylalanine ammonia lyase (PAL), beta-1,3-glucanase, and peroxidase (PO) activities. Under pot-culture conditions, in Methylobacterium sp. seed-treated groundnut plants challenge-inoculated with A. niger/S. rolfsii through foliar sprays on day 30, the activities of enzymes PO, PAL, and beta-1,3-glucanase increased constantly from 24 to 72 hours, after which decreased activity was noted. Five isozymes of polyphenol oxidase and PO could be detected in Methylobacterium-treated plants challenged with A. niger/S. rolfsii. Induced systemic resistance activity in groundnut against rot pathogens in response to methylotrophic bacteria suggests the possibility that pink-pigmented facultative methylotrophic bacteria might be used as a means of biologic disease control.