Aim: The aim of this study was to screen potential plant growth promoting rhizobacterial (PGPR) actinobacterial isolate with effective inhibition against anthracnose causing fungal pathogen Colletotrichum capsici. Methods and Results: In this study, actinobacterias were isolated from rhizosphere soil using dilution plate method and tested for antagonistic potential against pathogenic fungi C. capsici. In primary and secondary screening tests, the actinobacterial isolate BS-26 displayed high antagonistic activity against the fungal pathogen. Isolate BS-26 was identified as Streptomyces violaceoruber based on 16S rDNA sequencing. Furthermore, indole acetic acid production, phosphate solubilization and ammonia production have been confirmed in the S. violaceoruber that suggest their potential to be used as PGPR bacteria. A green house experiment showed that application of S. violaceoruber fermentation broth reduced the incidence of the chilli anthracnose and promoted the growth of chilli seedlings with a significant increase in germination %, total plant height, fresh weight and chlorophyll content when compared to controls. Conclusion: Streptomyces violaceoruber can be applied as a biofertilizer and biocontrol agent for growing chillies against the attack of fungal pathogen C. capsici. Significance of Impact of the Study: The damage caused by anthracnose disease is an issue of concern, affecting negatively the economy involved in chilli cultivation. As chemical methods of control have serious disadvantages, biocontrol approach using beneficial (PGPR) micro-organisms shall be a better alternative to control crop diseases.