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Rice (Oryza sativa L.) is one of the most important staple food crop of Pakistan as well as in the whole world. A number of phyto-pathogens including bacteria, fungi, nematodes and viruses along with abiotic stresses such as drought, salinity, nutrient deficiency and etc. have a detrimental effect on rice yield. In order to overcome the attack of pathogenic microbes, use of endophytes as bio-control agent is an attractive way to minimize the use of toxic agrochemicals. In this study, we screened seven strains of bacterial endophytes from the rhizosphere of rice plants. A colony PCR was performed using universal primers to characterize the isolated bacterial endophytes followed by sequence analysis. On the basis of molecular characterization, endophytes were identified as Pantoea sp., Burkholderiasp Bacillus megaterium, Pseudomonas flourescens, Lysinibacillus fusiformis, Delftia sp., and Acinetobacter baumnii. Additionally, endophytes were assayed for In vitro effects against Fusarium moniliforme and Rhizoctonia solani causing bakanae and sheath blight disease of rice, respectively. Pantoea sp., Burkholderia sp., Bacillus megaterium and Delftiasp moderately suppressed Fusarium moniliforme but Pseudomonas flourescens, Lysinibacillus fusiformis both showcased a strong inhibiting activity against Fusarium moniliforme. On the other hand, Pantoea sp., Burkholderia sp., Bacillus megaterium, Pseudomonas flourescens and Lysinibacillus fusiformis had a strong inhibitory effect against Rhizoctonia solani. The isolated endophytic bacteria were also found to be good producers of phyto-hormones such as hydrogen cyanide (HCN) and catalase. On the basis of our results, we conclude that the endophytic bacteria from rice rhizosphere possess antifungal activity against economic important pathogenic fungi.