Upon submergence, Azorhizobium caulinodans infects the semiaquatic legume Sesbania rostrata via the intercellular crack entry process, resulting in lateral root-based nodules. A gene encoding a gibberellin (GA) 20-oxidase, SrGA20ox1, involved in GA biosynthesis, was transiently up-regulated during lateral root base nodulation. Two SrGA20ox1 expression patterns were identified, one related to intercellular infection and a second observed in nodule meristem descendants. The infection-related expression pattern depended on bacterially produced nodulation (Nod) factors. Pharmacological studies demonstrated that GAs were involved in infection pocket and infection thread formation, two Nod factor-dependent events that initiate lateral root base nodulation, and that they were also needed for nodule primordium development. Moreover, GAs inhibited the root hair curling process. These results show that GAs are Nod factor downstream signals for nodulation in hydroponic growth.