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Oxygenous terpenoids are active components of many medicinal plants. However, current studies that have focused on enzymatic oxidation reactions cannot comprehensively clarify the mechanisms of oxygenous terpenoid synthesis and diversity. This study shows that an endophytic bacterium can trigger the generation of reactive oxygen species (ROS) that directly increase oxygenous sesquiterpenoid content and diversity in Atractylodes lancea. A. lancea is a famous but endangered Chinese medicinal plant that contains abundant oxygenous sesquiterpenoids. Geo-authentic A. lancea produces a wider range and a greater abundance of oxygenous sesquiterpenoids than the cultivated herb. Our previous studies have shown the mechanisms behind endophytic promotion of the production of sesquiterpenoid hydrocarbon scaffolds; however, how endophytes promote the formation of oxygenous sesquiterpenoids and their diversity is unclear. After colonization by Pseudomonas fluorescens ALEB7B, oxidative burst and oxygenous sesquiterpenoid accumulation in A. lancea occur synchronously. Treatment with exogenous hydrogen peroxide (H2O2) or singlet oxygen induces oxidative burst and promotes oxygenous sesquiterpenoid accumulation in planta. Conversely, pretreatment of plantlets with the ROS scavenger ascorbic acid significantly inhibits the oxidative burst and oxygenous sesquiterpenoid accumulation induced by P. fluorescens ALEB7B. Further in vitro oxidation experiments show that several oxygenous sesquiterpenoids can be obtained from direct oxidation caused by H2O2 or singlet oxygen. In summary, this study demonstrates that endophytic bacterium-triggered ROS can directly oxidize oxygen-free sesquiterpenoids and increase the oxygenous sesquiterpenoid content and diversity in A. lancea, providing a novel explanation of the mechanisms of oxygenous terpenoid synthesis in planta and an essential complementarity to enzymatic oxidation reactions., (Copyright © 2016, American Society for Microbiology. All Rights Reserved.)