Symbiosis between rhizobia soil bacteria and legume plants results in the formation of root nodules where plant cells are fully packed with nitrogen fixing bacteria. In the host cells, the bacteria adapt to the intracellular environment and gain the ability for nitrogen fixation. Depending on the host plants, the symbiotic fate of bacteria can be either reversible or irreversible. In Medicago and related legume species, the bacteria undergo a host-directed multistep differentiation process culminating in the formation of elongated and branched polyploid bacteria with definitive loss of cell division ability. The plant factors are nodule-specific symbiotic peptides. Approximately 600 of them are nodule-specific cysteine-rich (NCR) peptides produced in the rhizobium-infected plant cells. NCRs are targeted to the endosymbionts, and concerted action of different sets of peptides governs different stages of endosymbiont maturation, whereas the symbiotic function of individual NCRs is unknown. This study focused on NCR247, a cationic peptide exhibiting in vitro antimicrobial activities. We show that NCR247 acts in those nodule cells where bacterial cell division is arrested and cell elongation begins. NCR247 penetrates the bacteria and forms complexes with many bacterial proteins. Interaction with FtsZ required for septum formation is one of the host interventions for inhibiting bacterial cell division. Complex formation with the ribosomal proteins affects translation and contributes to altered proteome and physiology of the endosymbiont. Binding to the chaperone GroEL amplifies the NCR247-modulated biological processes. We show that GroEL1 of Sinorhizobium meliloti is required for efficient infection, terminal differentiation, and nitrogen fixation.