The presence of dry and mucoid colonies in cultures of rhizobial strains used in the production of commercial Australian inoculants is of concern for quality assurance because of the possibility of altered capacity for nodulation and nitrogen fixation by the different colony types. In this study, single colony isolates obtained from dry and mucoid colonies present in commercial cultures of Sinorhizobium meliloti were investigated to identify stability in culture, genetic identity and changes in exopolysaccharide (EPS) production, nodulation and nitrogen fixation. The 2 strains studied were WSM688 and WSM826 (Australian inoculant strains for annual and perennial medics, respectively), both of which produced only mucoid colonies on agar media when originally isolated from nodules. Dry and mucoid single colony isolates from the ‘mother cultures’ of the 2 strains exhibited stable colony phenotypes during successive subculturing in our laboratory and were shown to be most closely related to S. meliloti using 16S rRNA partial sequencing. All isolates produced at least 1 of 3 exopolysaccharides (succinoglycan, EPS II and K antigen) that are required for successful nodulation of Medicago species by S. meliloti strains, as indicated by nodulation of host legumes. Strain WSM826 isolates probably produce succinoglycan, as shown by similarity to the succinoglycan-producing strain Rm1021 in a calcofluor binding assay. In contrast to published work, there was no evidence that loss of mucoidy in dry colony isolates of either strain was associated with the presence of an insertion sequence element in the expR gene that inhibits EPS II production. For strain WSM688, dry and mucoid isolates were identical by PCR fingerprinting and showed a similar capacity to nodulate and fix nitrogen with the target host legume M. truncatula in glasshouse tests. In contrast, strain WSM826 mucoid isolates produced PCR fingerprints that were different from each other and from the WSM826 dry colony isolates. Dry and mucoid colonies may have arisen from substantial genetic change or through contamination of cultures by other S. meliloti strains. One WSM826 mucoid isolate (826-3) produced significantly lower shoot dry weight when inoculated onto both the target host M. sativa and non-target host M. truncatula, even though the capacity to nodulate both hosts was retained. This suggests that this isolate was affected in its nitrogen fixation capacity. Further research is required to identify the origin and extent of colony variation in commercial S. meliloti cultures.