A new disease in rice that is characterized by leaf bleaching was recently identified in some fields in the Mekong Delta region of Vietnam. The present study was the first to isolate and identify the pathogen of this disease. We confirmed that leaf bleaching symptoms were due to infection with Methylobacterium indicum bacteria using molecular biology approaches. A full-length genome analysis of pathogenic Methylobacterium strain VL1 revealed that it comprises a single chromosome and six plasmids, with a total size of 7.05 Mbp and GC content of 70.5%. The genomic features of VL1 were similar to those of the non-pathogenic M. indicum strain SE2.11T; however, VL1 possessed additional unique genes, including those related to homoserine lactone biosynthesis. We established a loop-mediated isothermal amplification (LAMP) assay using the unique sequences of VL1 as target sequences for the rapid and simple detection of pathogenic M. indicum strains. Our initial evaluation demonstrated that the LAMP assay successfully distinguished between pathogenic and non-pathogenic strains infecting rice plants in a rapid and sensitive manner. The present results provide insights into the pathogenesis and development of control measures for novel rice diseases.