Bioactive compounds from medicinal plant sources are of great interest to scientists due to their druggability and their health benefits for plants, animals, and humans. Besides that, bioactive compounds and pure phytochemicals have also been discovered in endophytic bacteria that are found in plant tissues. As a result of the symbiosis, plants also benefit greatly from harboring these endophytes, as these bacteria promote plant growth and improve the resistance of plants to various pathogens. Endophytes can induce both biotic and abiotic stress tolerance in inoculated plants. In addition, they can regulate the synthesis of secondary metabolites with important medicinal properties and induce various biological effects. Interactions between host plants and endophyte communities involve co-evolutionary processes controlled by colonization. This is influenced by genotype, growth stage, physiological state, plant tissue type, agricultural practices, and environmental conditions. This evolutionary process has resulted in an intimate relationship between endophytes and their hosts, and this interaction is driven by changes at the cellular and molecular levels that affect plant development. The purpose of this review is to understand the concept of endophytes, the biodiversity of endophytic bacteria in medicinal plants, the entry routes of endophytic bacteria into plants, and then the relationship between endophytic bacteria and medicinal plants, and the impact of bacterial endophytes on bioactive compounds production in plants.