Certain plant growth-promoting rhizobacteria (PGPR), in the absence of physical contact with a plant stimulate growth via volatile organic compound (VOC) emissions, through largely unknown mechanisms. To probe how PGPR VOCs trigger growth in plants, RNA transcript levels of Arabidopsis seedlings exposed to Bacillus subtilus (strain GB03) were examined using oligonucleotide microarrays. In screening over 26,000 protein-coded transcripts, a group of approximately 600 differentially expressed genes related to cell wall modifications, primary and secondary metabolism, stress responses, hormone regulation and other expressed proteins were identified. Transcriptional and histochemical data indicate that VOCs from the PGPR strain GB03 trigger growth promotion in Arabidopsis by regulating auxin homeostasis. Specifically, gene expression for auxin synthesis was up regulated in aerial regions of GB03-exposed plants; auxin accumulation decreased in leaves and increased in roots with GB03 exposure as revealed in a transgenic DR5::GUS Arabidopsis line, suggesting activation of basipetal auxin transport. Application of the auxin transport inhibitor 1-naphthylphthalamic acid (NPA) restricted auxin accumulation to sites of synthesis thereby preventing GB03-mediated decreases in shoot auxin levels as well as thwarting GB03-mediated growth promotion. In addition, microarray data revealed coordinated regulation of cell wall loosening enzymes that implicated cell expansion with GB03 exposure, which was confirmed by comparative cytological measurements. The discovery that bacterial VOCs, devoid of auxin or other known plant hormones regulate auxin homeostasis and cell expansion provides a new paradigm as to how rhizobacteria promote plant growth.