Plants benefit extensively by harbouring endophytic microbes. They promote plant growth and confer enhanced resistance to various pathogens. However, the way the interactions among endophytes influence the plant productivity has not been explained. Present study experimentally showed that endophytes isolated from rice (Oryza sativa) used as the test plant produced two types of interactions; biofilms (bacteria attached to mycelia) and mixed cultures with no such attachments. Acidity, as measured by pH in cultures with biofilms was higher than that of fungi alone, bacteria alone or the mixed cultures. Production of indoleacetic acid like substances (IAAS) of biofilms was higher than that of mixed cultures, fungi or bacteria. Bacteria and fungi produced higher quantities of IAAS than mixed cultures. In mixed cultures, the potential of IAAS production of resident microbes was reduced considerably. There was a negative relationship between IAAS and pH of the biofilms, indicating that IAAS was the main contributor to the acidity. However, such a relationship was not observed in mixed cultures. Microbial acid production is important for suppressing plant pathogens. Thus the biofilm formation in endophytic environment seems to be very important for healthy and improved plant growth. However, it is unlikely that an interaction among endophytes takes place naturally in the endophytic environment, due to physical barriers of plant tissues. Further, critical cell density dependant quorum sensing that leads to biofilm formation may not occur in the endophytic environment as there is a limited space. As suchin vitro production and application of beneficial biofilmed inocula of endophytes are important for improved plant production in any agro-ecosystem. The conventional practice of plant inoculation with monocultures or mixed cultures of effective microbes may not give the highest microbial effect, which may only be achieved by biofilm formation.