Endophytic yeasts of genus Rhodotorula are gaining importance for their ability to improve plant growth. The nature of their interaction with plants, however, remains unknown. Rhodotorula mucilaginosa JGTA-S1 was isolated as an endophyte of Typha angustifolia and promoted growth in the host. To investigate the life-strategy of the yeast from a genomics perspective, we used Illumina and Oxford Nanopore reads to generate a high-quality annotated draft assembly of JGTA-S1 and compared its genome to three other Rhodotorula yeasts and the close relative Rhodosporidium toruloides. JGTA-S1 is a haploid yeast possessing several genes potentially facilitating its endophytic lifestyle such as those responsible for solubilizing phosphate and producing phytohormones. An intact mating-locus in JGTA-S1 raised the possibility of a yet unknown sexual reproductive cycle in Rhodotorula yeasts. Additionally, JGTA-S1 had functional anti-freezing genes and was also unique in lacking a functional nitrate-assimilation pathway—a feature that is associated with obligate biotrophs. Nitrogen-fixing endobacteria were found within JGTA-S1 that may circumvent this defective N-metabolism. JGTA-S1 genome data coupled with experimental evidence give us an insight into the nature of its beneficial interaction with plants. © The Author(s) 2019.