Bacterial nodulation factors (NFs) are essential signaling molecules for the initiation of a nitrogen-fixing symbiosis in legumes. NFs are perceived by the plant and trigger both local and distant responses, such as curling of root hairs and cortical cell divisions. In addition to their requirement at the start, NFs are produced by bacteria that reside within infection threads. To analyze the role of NFs at later infection stages, several phases of nodulation were studied by detailed light and electron microscopy after coinoculation of adventitious root primordia of Sesbania rostrata with a mixture of Azorhizobium caulinodans mutants ORS571-V44 and ORS571-X15. These mutants are deficient in NF production or surface polysaccharide synthesis, respectively, but they can complement each other, resulting in functional nodules occupied by ORS571-V44. The lack of NFs within the infection threads was confirmed by the absence of expression of an early NF-induced marker, leghemoglobin 6 of S. rostrata. NF production within the infection threads is shown to be necessary for proper infection thread growth and for synchronization of nodule formation with bacterial invasion. However, local production of NFs by bacteria that are taken up by the plant cells at the stage of bacteroid formation is not required for correct symbiosome development.