The nitrogen fixing methylotrophic bacteria were isolated from the nodules of tropical legumes. Two isolates CMCJ317 and CMSA322 isolated from Crotalaria juncea and Sesbania aculeata possessing high nitrogenase activities under pure culture conditions and able to form nodules under inoculated conditions were further characterized. The biochemical characteristics revealed their close relationship with Methylobacterium nodulans type strain ORS2060. The PCR amplification of nodA and mxaF genes showed the expected 584 and 555 bp products, respectively, similar to M. nodulans ORS2060 and digestion with restriction enzymes revealed that the two isolates differed. The strains showed significantly higher nitrogenase activity and also improved nodulation and shoot nitrogen of the plants when inoculated to Macroptilum atropurpureum. CMCJ317 and CMSA322 formed nodules on C. juncea and M. atropurpureum under green house conditions and also significantly increased the nitrogen concentration in shoots. These findings show that the ability to establish symbiosis with legumes is more widespread in Methylobacterium.