This study was designed to isolate and characterize endophytic bacteria from sunflower (Helianthus annuus) grown under irrigation and water stress (drought) conditions, to analyze growth of isolated bacteria under drought condition, and to evaluate the ability of bacteria isolated from plants cultivated under drought to produce jasmonates (JAs) and abscisic acid (ABA). Bacteria were isolated from soil samples collected when sunflower plants were at the end of the vegetative stage. A total of 29 endophytic strains were isolated from plants grown under irrigation or drought condition. Eight strains (termed SF1 through SF8) were selected based on nitrogen-fixing ability. All eight strains showed positive catalase and oxidase activities; five strains (SF2, SF3, SF4, SF5, SF7) solubilized phosphates; none of the strains produced siderophores. Strains SF2, SF3, SF4, and SF5, the ones with the highest phosphate solubilization ability, strongly inhibited growth of the pathogenic fungi Verticillum orense and Sclerotinia sclerotiorum but had less inhibitory effect on Alternaria sp. Among the eight strains, SF2 showed 99.9% sequence homology with Achromobacter xiloxidans or Alcaligenes sp., while the other seven showed 99.9% homology with Bacillus pumilus. Strains SF2, SF3, and SF4 grown in control medium produced jasmonic acid (JA), 12-oxo-phytodienoic acid (OPDA), and ABA. These three strains did not differ in amount of JA or OPDA produced. ABA content was higher than that of JA, and production of both ABA and JA increased under drought condition. The characteristics of these isolated bacterial strains have technological implications for inoculant formulation and improved growth of sunflower crops.