In agriculture, instead of synthetic fertilizers, natural bio-inoculants can be used to increase growth and yield of crops. For this purpose, we report a thermophilic bacteria Klebsiella sp. strain PMnew, isolated from Paniphala hot spring. The strain was characterized and assessed for plant growth-promoting traits. Oryza sativa L. var Swarna (rice) seeds were inoculated with the strain to study the bacterization effect on vegetative and reproductive growth of rice plants. The results indicate that PMnew produces organic acids to solubilize phosphate (550.16 +/- 0.04 mu g/ml), fixes nitrogen, produces indole compounds, siderophore, and ACC deaminase, and shows heavy metal resistance to chromium, cobalt, arsenic, cadmium, and mercury. It also possesses the ability to utilize several monomeric and polymeric sugars as sole carbon source including starch, agar, xylan, gelatin, and pectin, and can grow under both nutrient-rich and deficient conditions. Inoculated rice plants grew twice the length of control plants and surpassed the total grain mass yield of control plants by almost 18 times. Thus, this study brings forth a broad spectrum and easy to cultivate bio-inoculant, which can be used to increase rice production.