A total of 137 bacterial isolates from surface sterilized root, stem, and nodule tissues of soybean were screened for their antifungal activity against major phytopathogens like Rhizoctonia bataticola, Macrophomina phaseolina, Fusarium udam, and Sclerotium rolfsii. Nine bacterial endophytes suppressed the pathogens under in vitro plate assay. These were characterized biochemically and identified at the genus level based on their partial sequence analysis of 16S rDNA. Eight of the isolates belonged to Bacillus and one to Paenibacillus. The phylogenetic relationship among the selected isolates was studied and phylogenetic trees were generated. The selected isolates were screened for biocontrol traits like production of hydrogen cyanide (HCN), siderophore, hydrolytic enzymes, antibiotics, and plant growth promoting traits like indole 3-acetic acid production, phosphate solubilization, and nitrogen fixation. A modified assessment scheme was used to select the most efficient biocontrol isolates Paenibacillus sp. HKA-15 (HKA-15) and Bacillus sp. HKA-121 (HKA-121) as potential candidates for charcoal rot biocontrol as well as soybean plant growth promotion.