Exploring indoleacetic acid (IAA) biosynthesis pathways of plant growth promoting bacteria and their ability to synthesize IAA is crucial for understanding the promotion mechanism and for developing more efficient microbial fertilizer. In this study, 118 bacterial endophytic strains were isolated from tomato root and 68 isolates were identified as members of Bacillus and Pseudomonas genus. After screening abilities to synthesize IAA in vitro and promote plant growth for these identified Bacillus and Pseudomonas strains, 7 endophytic strains Bacillus sp. Y_21, B. paramycoides Y_29, B. albus Y_96, B. cereus Y_121, P. plecoglossicida Y_157, Bacillus sp. Y_165 and B. aryabhattai Y_170 strains showed a significant promotion role on wheat root or leaf, including 4 endophytic strains with the potential ability to utilize intermediate metabolites, such as tryptamine and indole acetamide, to produce IAA. Genomic sequencing analysis for selected representative plant growth promoting endophytes showed that IAA-producing bacteria B. cereus mr31 and P. putida Y_166 separately harbored a complete indoleacetamide (IAM) and complete tryptamine (TAM) pathway; whereas, Bacillus sp. Y_165 and B. aryabhattai Y_170, two strains producing IAA not using tryptophan but with indole-3-acetamide, had an incomplete IAM pathway. Fermentation experiments of three genome-sequenced strains using wheat or tomato root extracts as substrate, and combining with UHPLC–MS/MS analysis for wheat root extracts, demonstrated that Bacillus sp. Y_165 strain might produce IAA by using the plant-derived indole-3-acetamide. Our study first demonstrated a novel potential mechanism for the plant growth promoting endophytes to biosynthesize IAA using plant-derived intermediates. This additional mechanism has deepened our understanding of how bacterial endophytes promote plant health and resilience, offering valuable insights about how plants regulate IAA homeostasis within their internal tissues in association with bacterial endophytes.