Aims To isolate and characterize the endophytes from papaya fruits and to determine the fermentative potential of the strains. Methods and Results Endophytes provide potential sources for novel natural products for the use in agriculture and nutrition. There is very limited information on isolation and characterization of bacterial endophytes from papaya. We describe isolation and characterization of eighteen endophytes of papaya fruit from four economically important papaya varieties viz Red lady, Solo, Coorg Honey and Bangalore. The phylogenetic analysis based on the 16S rRNA sequence revealed that isolated endophytes are genetically distinct and cluster as discrete clades in the dendrogram. The Bacillus species is a predominant bacterial endophyte across papaya varieties. The seeds and the endocarp of papaya fruits harbour Kocuria, Acinetobacter and Enterobacter species. The Staphylococcus species were detected in the fruit mesocarp of two papaya varieties used in the study. The endophytes isolated from papaya fruits were capable of producing extracellular enzymes like amylase, cellulase, pectinase and xylanase. Three isolates, Bacillus (PE-LR-1 and PE-LR-3) and Kocuria (PE-LR-2), were selected for fruit fermentation, and antioxidant potential of the fermented product was evaluated. PE-LR-3 fermented product has the free radical scavenging activity of 61.2% and a microbial cocktail of PE-LR-3 with Saccharomyces cerevisiae MTCC 2918 enhances the antioxidant potential to 75.7%. Conclusion These findings suggest that different parts of papaya fruits harbour an array of bacterial endophytes that could be important agents in attributing the high nutritive status to the fruit and can serve as potent microbial cocktails for developing value-added fermented products of this important fruit. Significance and Impact of study This study describes isolation of a bacterial endophyte from papaya fruit that is capable of improving the antioxidant potential of raw papaya after fermentation.