Abstract: Background and Objective: Casuarina equisetifolia is a fast growing evergreen tree grown by framers under agro-forestry systems in Tamil Nadu state of Southern India. It is encountered by several fungal diseases. The objective of the study was to develop eco-friendly management of the diseases; sixteen different bacterial isolates were isolated from the rhizosphere region of healthy Casuarina equisetifolia trees and tested for its salt (Sodium chloride) tolerance and antagonistic potential. Materials and Methods: All the isolates were subjected to salt tolerance study, six best isolates were selected and tested its antagonistic efficacy against plant pathogenic fungi viz., Fusarium oxysporum (damping off), Rhizoctonia solani (damping off) and Trichosporium vesiculosum (blister bark) under normal and salt stressed conditions. The presence of bioactive compounds from best isolate was screened using GC-MS analysis. All the data were analyzed using one-way ANOVA and the significant difference among the means were compared by Duncan’s Multiple Range Test (DMRT) at p = 0.05 level. Results: It was observed that the bacterial isolate KS-21 showed maximum growth retardation of pathogenic fungal mycelium and it was effective in production of diffusible and volatile metabolites against two pathogens, except Trichosporium vesiculosum which was least controlled by all the bacterial isolates. There was no marked variation in bio-control activity in sodium chloride amended medium. Based on molecular characterization, the bacterial isolate KS-21 was identified as Bacillus pumilus. Ethyl acetate extract fraction of the bacterium exhibited maximum zone of inhibition against Fusarium oxysporum. Altogether, 19 bioactive compounds were identified through GC-MS analysis. Conclusion: It was concluded that the formulation of bio-fungicide using Bacillus pumilus culture or its products will be a good alternative for hazards chemical fungicides.