Nitrogen-fixing bacterial strain, designated B2(T), was isolated from methane-oxidation enrichment originating from a Sphagnum-dominated raised peatland in Tver region, Russia, and its phenotypic, chemotaxonomic and genomic characteristics were investigated. Cells of isolate were Gram-negative, aerobic, rod or spiral-shaped, with motility provided by a single polar flagellum in liquid media and peritrichous flagella on solid media. Strain was able to grow at 15-40 degrees C, pH 5.5-8.5 and tolerated NaCl to 2.0% (w/v). Strain B2(T) gave positive amplification for dinitrogen reductase (nifH gene) and acetylene reduction activity was recorded up to 1250 nmol ethylene h(-1) (mg protein)(-1). Analysis of 16S rRNA showed that B2(T) represents a member of the genus Azospirillum and had the highest sequence similarity with A. humicireducens SgZ-5(T) (97.92 %). The predominant quinone system was ubiquinone Q-10 and the major fatty acids were C-18 : 1 omega 7, C-16 : 1 omega 7 and C-16 : 0. The strain was facultative methylotrophic and used methanol and formate for the growth. Genome sequencing revealed a genome size of 8.0 Mbp and a G+C content of 67.8 mol%. The mxaFI genes encoding methanol dehydrogenase were absent, but a homologous xoxF gene was detected. The genes encoding enzymes involved in the biosynthesis of tetrahydromethanopterin (H4MPT) (formaldehyde oxidation) and NAD-linked formate dehydrogenase (fdsABG) were identified. Pairwise determined whole genome average nucleotide identity (gANI) values confirmed that strain B2(T) represents a novel species, for which we propose the name Azospirillum palustre sp. nov. with the type strain B2(T) (VKM B-3233(T), KCTC 62613(T)).