Rhizobium nodulation (Nod) factors are lipo-chitooligosaccharides that act as symbiotic signals, eliciting several key developmental responses in the roots of legume hosts. Using nodulation-defective mutants of Medicago truncatula, we have started to dissect the genetic control of Nod factor transduction. Mutants in four genes (DMI1, DMI2, DMI3, and NSP) were pleiotropically affected in Nod factor responses, indicating that these genes are required for a Nod factor-activated signal transduction pathway that leads to symbiotic responses such as root hair deformations, expressions of nodulin genes, and cortical cell divisions. Mutant analysis also provides evidence that Nod factors have a dual effect on the growth of root hair: inhibition of endogenous (plant) tip growth, and elicitation of a novel tip growth dependent on (bacterial) Nod factors. dmi1, dmi2, and dmi3 mutants are also unable to establish a symbiotic association with endomycorrhizal fungi, indicating that there are at least three common steps to nodulation and endomycorrhization in M. truncatula and providing further evidence for a common signaling pathway between nodulation and mycorrhization.