Piriformospora indica, an endophytic fungus of Sebacinales, colonizes the roots of many plant species including Arabidopsis thaliana. The symbiotic interaction promotes plant per-formance, growth and resistance/tolerance against abiotic and biotic stress. We demonstrate that exudated compounds from the fungus activate stress and defense responses in the Arabidopsis roots and shoots before the two partners are in physical contact. They induce stomata closure, stimulate reactive oxygen species (ROS) production, stress-related phytohormone accumulation and activate defense and stress genes in the roots and/or shoots. Once a physical contact is established, the stomata re-open, ROS and phytohormone levels decline, and the gene expression pattern indicates a shift from defense to mutualistic interaction. We propose that exudated compounds from P. indica induce stress and defense responses in the host. Root colonization results in the downregulation of defense responses and the activation of genes involved in promoting plant growth, metabolism and performance. Twelve day-old (48 h cold treatment and 10 days of illumination) Arabidopsis seedlings of equal sizes were selected for co-cultivation experiments. They were transferred to PNM plates with a nylone membrane on the top (Johnson et al. 2011) and exposed to a fungal plug 5 mm in diameter or a KM plug of the same size without fungal hyphae (control). The plugs were placed 3 cm away from the closest root part . The light intensity (80 ± 5 μmol m-2 sec-1) was checked every third day to ensure that both P. indica- and mock-treated seedlings receive equal amounts of light.