This study aimed to identify Ammodendron bifolium endophytic bacteria, and to evaluate promoting mechanism of selected isolates on seed germination and their effects on host osmotic-stress tolerance. Forty-five strains were isolated from A. bifolium and were classified into 13 different genera by 16S rDNA gene sequence analysis. AY3, AY9 and AG18, which were identified as Staphylococcus, Kocuria, Bacillus sp., promoted host seed ethylene release during germination. Ethrel and 1-aminocyclopropane-1-carboxylic acid (ACC) imitated the effect of AY3, AY9 and AG18 on seed germination. The data suggest that ethylene mediates AY3-, AY9-, AG18-induced A. bifolium seed germination. In addition, osmotic stress prevented seed germination and radicle elongation. However, the inhibitory effect of osmotic stress on seed germination and radicle elongation were rescued by AY3, AY9 and AG18. The results show that AY3, AY9 and AG18 increased osmotic-stress tolerance in A. bifolium. AY3, AY9, AG18 induced A. bifolium seed germination through promoting ethylene production during endophytic bacteria-plant interaction, and increase osmotic-stress tolerance in A. bifolium. AY3, AY9 and AG18 are potential candidates for the protection of A. bifolium.