The aquatic grass Zizania latifolia grows symbiotically with the fungus Ustilago esculenta producing swollen structures called Jiaobai, widely cultivated in China. A new disease of Z. latifolia was found in Zhejiang Province, China. Initial lesions appeared on the leaf sheaths or sometimes on the leaves near the leaf sheaths. The lesions extended along the axis of the leaf shoots and formed long brown to dark brown streaks from the leaf sheath to the leaf, causing sheath rot and death of entire leaves on young plants. The pathogen was isolated and identified as the bacterium Pantoea ananatis, based on 16S ribosomal RNA (rRNA) gene sequencing, multilocus sequence analysis (atpD (β-subunit of ATP synthase F1), gyrB (DNA gyrase subunit B), infB (translation initiation factor 2), and rpoB (β-subunit of RNA polymerase) genes), and pathogenicity tests. Ultrastructural observations using scanning electron microscopy revealed that the bacterial cells colonized the vascular tissues in leaf sheaths, forming biofilms on the inner surface of vessel walls, and extended between vessel elements via the perforated plates. To achieve efficient detection and diagnosis of P. ananatis, species-specific primer pairs were designed and validated by testing closely related and unrelated species and diseased tissues of Z. latifolia. This is the first report of bacterial sheath rot disease of Z. latifolia caused by P. ananatis in China.