'UCB-1' (Pistacia atlantica × Pistacia integerrima) rootstock is a hybrid cultivar widely used by the U.S. pistachio industry. In the last three years, a large number of micropropagated UCB-1 pistachio rootstocks planted in California and Arizona orchards exhibited shortened internodes, stunted growth, swollen lateral buds, bushy/bunchy growth, stem galls with multiple buds, and twisted roots with minimal lateral branching. Field T-budding success in affected orchards was reduced to approximately 30% with unusual bark cracking often observed around the bud-union. The percentage of abnormal rootstocks within affected orchards varied from 10 to 90%. We have termed the cumulative symptoms "pistachio bushy top syndrome" (PBTS) to describe these affected trees. Two isolates, both containing virulence factors from the phytopathogen Rhodococcus fascians, were identified on symptomatic trees in field and nursery samples. Micropropagated UCB-1 trees inoculated with the Rhodococcus isolates exhibited stunted growth, shortened internode length, swollen lateral buds, sylleptic branching, and differences in root morphology, compared with control UCB-1 trees. To our knowledge, this is the first report of Rhodococcus isolates, related to Rhodococcus fascians, causing disease on a commercial tree crop and the results presented indicate that this organism is responsible at least in part for PBTS in California and Arizona.