Key message <p>J13 imparts drought tolerance to <i>A. thaliana</i> by accelerating plant auxin-dependent, auxin-amino acid conjugation pathway. Plant mutants defective in this pathway do not respond favorably to the bacterium under drought. </p> Abstract <p>The precise roles of plant auxin signaling and metabolism in beneficial plant-microbial interaction, especially for abiotic stress tolerance, have not been clearly understood. In this study, we have used the drought-alleviating PGPR strain, <i>Bacillus endophyticus</i> J13 and investigated its impact on auxin signaling and homeostasis in <i>Arabidopsis thaliana</i>, under drought stress. While drought stress elevated the levels of free auxin in <i>A. thaliana</i> plants, J13 inoculation under drought stress lowered the auxin levels in the plants. However, the decreased auxin levels in the drought-stressed plants were accompanied by an increase in the expression of key auxin biosynthetic genes. To understand the reason for this discrepancy, we investigated the role of J13 in auxin conjugation in <i>A. thaliana</i> under drought stress, and observed that, J13 upregulated the transcript levels of genes involved in auxin-dependent auxin conjugation in the plants. <i>A. thaliana</i> mutants deficient in auxin-dependent auxin conjugation (<i>GH3.3</i>) and auxin signalling (<i>axr2-1</i>) did not respond favourably to J13 inoculation under drought conditions. Rather, these mutants exhibited enhanced susceptibility to drought conditions under J13 inoculation. To understand the underlying mechanism of this enhanced drought susceptibility in the mutants, we studied the impact of J13 on the expression of selected genes of salicylic acid-mediated immune signaling in the plants. These mutants exhibited J13-specific modulation in the expression of these genes. Our study thus establishes the importance of auxin-dependent auxin conjugation as a key mechanism of PGPR-mediated drought amelioration in plants.</p>