Abstract: Background and Objective: Endophytic bacteria can protect host plants by producing secondary metabolites and also improve host plant growth by various direct and indirect mechanisms. This unique character makes a special role in, using endophytic bacteria in sustainable agriculture. The study aims to isolate endophytic bacteria from Azadirachta indica (neem) leaf and screen for their biocontrol and plant growth-promoting properties. Materials and Methods: Thirteen endophytic bacteria were isolated from neem leaf and it was tested for their in vitro antifungal activities against Rhizoctonia solani. A total of 3 isolates (N1B, N4B and N5B) were selected on the broad antifungal activity (50, 56 and 75% mycelial inhibition). Among different solvents used for the extraction of secondary metabolites from endophytic bacteria, only ethyl acetate extract of N5B showed maximum zone of inhibition in well diffusion method against fungal pathogen. Results: The GC-MS analysis of ethyl acetate extracts of N5B exhibited 14 compounds with antifungal activity, such as dimethoxyglycerol docosyl ether, pentadecanoic acid, oleic acid etc. Selected 3 endophytic isolates were identified up to molecular level using 16S rRNA sequencing and it was identified as Bacillus haynesii, Stenotrophomonas maltophilia and Pseudomonas aeruginosa. The identified isolates were used for nursery experiments based on their strong in vitro antifungal and PGP activities such as P, K and Zn solubilization, N fixation, IAA, HCN and EPS production. Conclusion: The tested bacterial isolates significantly decreased disease severity in rice, infected with R. solani and increased plant biomass when compared with un-inoculated control. The findings suggested above mentioned 3 bacterial species may be promising candidates as a biocontrol agent to confer resistance to sheath blight disease of rice.