Knowledge on the genetic basis underlying interactions between beneficial bacteria and woody plants is still very limited, and totally absent in the case of olive. We aimed to elucidate genetic responses taking place during the colonization of olive roots by the native endophyte Pseudomonas fluorescens PICF7, an effective biocontrol agent against Verticillium wilt of olive. Roots of olive plants grown under non-gnotobiotic conditions were collected at different time points after PICF7 inoculation. A Suppression Subtractive Hybridization cDNA library enriched in induced genes was generated. Quantitative real time PCR (qRT-PCR) analysis validated the induction of selected olive genes. Computational analysis of 445 olive ESTs showed that plant defence and response to different stresses represented nearly 45% of genes induced in PICF7-colonized olive roots. Moreover, quantitative real-time PCR (qRT-PCR) analysis confirmed induction of lipoxygenase, phenylpropanoid, terpenoids and plant hormones biosynthesis transcripts. Different classes of transcription factors (i.e., bHLH, WRKYs, GRAS1) were also induced. This work highlights for the first time the ability of an endophytic Pseudomonas spp. strain to mount a wide array of defence responses in an economically-relevant woody crop such as olive, helping to explain its biocontrol activity.