Motivated by possible implications on the problem of moduli stabilization and other phenomenological aspects, we study D-brane instanton effects in flux compactifications. We focus on a local model and compute non-perturbative interactions generated by gauge and stringy instantons in a N = 1 quiver theory with gauge group U(N_0) x U(N_1) and matter in the bifundamentals. This model is engineered with fractional D3-branes at a C^3/(Z_2 x Z_2) singularity, and its non-perturbative sectors are described by introducing fractional D-instantons. We find a rich variety of instanton-generated F- and D-term interactions, ranging from superpotentials and Beasley-Witten like multi-fermion terms to non-supersymmetric flux-induced instanton interactions.
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