Molasses grass (Melinis minutiflora Beauv.) is a good fodder in tropical area. In this study, endophytic bacteria with high nitrogenase activity were isolated from the roots and stems of molasses grass grown in Guangdong province by using a selective medium under anaerobic or aerobic conditions. SDS-PAGE of whole-cell proteins clustered all the 15 isolates into a single group. 16S rDNA sequence analysis showed that these isolates belonged to the genus Azospirillum, and were closely related to A. lipoferum. BIOLOG test indicated that the representative strain, TMCY243, from molasses grass was able to utilize a wider range of carbon sources than the type strain DSM 1691 of A. lipoferum. Based on these results, we concluded that the endophytic diazotrophs isolated from molasses grass represented a new species of Azospirillum. This bacterium distributed widely in association with its host plant in the subtropic regions of China.