The interaction between plant and diazotrophs would influence the synthesis of phytohormone [indole-3- acetic acid (IAA)]. Generally, IAA excreted by the bacteria would increase top and root biomass and lateral root numbers of the host plants. Thus, the objectives of this study were to estimate IAA productivity of free-living diazotrophs and to observe the effects of IAA produced on root development and shoot growth of in vitro oil palm plantlets. Four diazotrophic bacteria used in the study, Herbaspirillum seropedicae (Z78), Microbacterium sp. (E7), Acetobacter sp. (E9) and Microbacterium sp. (E14) successfully produced IAA under free-living conditions. These diazotrophs exhibited optimum productivity of IAA during the log growth phase. Isolates of Microbacterium sp. E7 and E14 produced the higher concentration of IAA and also higher overall productivity of IAA compared to the other isolates tested. In order to observe plant growth-promoting effects of the phytohormones produced by the diazotroph, all the tested diazotrophs were inoculated onto the in vitro (tissue-cultured) oil palm shoots (Elaeis guineensis Jacq.). In associative conditions, inoculation of Z78 showed a significant increment in number of secondary roots, fresh weight, and protein content of oil palm shoots compared to those receiving control treatments. Significant responses of isolates E7 and E14 were also observed in the initiation of secondary roots, protein content and the increment of shoot fresh weight. This study concluded that IAA produced by Z78, E7 and E14 could contribute to enhanced growth and development of in vitro oil palm shoots and can be further developed into a potential biofertiliser.