ABSTRACTIn this study, the effect of endophytic fungus Piriformospora indica on Rhizoctonia solani AG1-IA, causal agent of sheath blight disease, was investigated. In addition, plant defence responses activated in P. indica-inoculated rice plants were analysed. Two-week-old seedlings were inoculated by dipping their roots in P. indica chlamydospore suspension and transferred to pots containing sterilized soil. After two weeks, the seedlings pre-inoculated with P. indica were inoculated with R. solani. Statistical analysis of biological indicators showed that application of P. indica increased both fresh and dry weight of rice shoots and roots, compared to those of uninoculated healthy controls and the samples only inoculated with R. solani. Accumulation of hydrogen peroxide (H2O2) and activity of antioxidants such as superoxide dismutase (SOD) and guaiacol peroxidase (GPX) in plants inoculated with P. indica, R. solani, and P. indica-R. solani were investigated. The obtained results revealed that P. indica not only increased the plant biomass, but also delayed the infection process of R. solani and decreased sheath blight severity. Decreased severity of the disease was associated with decreased levels of H2O2 and increased SOD activity. Considering the necessity of reducing fungicide application, using P. indica in seedling bed before transplantation to the field could be a novel and effective method to increase rice production and decrease sheath blight progress.