In recent years, considerable attention has been paid to Plant Growth Promoting Rhizobacteria (PGPR) as the best choice in place of agrochemicals, to facilitate the biocontrol of soil and seed borne plant pathogens (Weller, 1988; Gupta et al., 2001; Haas and Defago, 2005). Most of the bacteria exhibiting Plant Growth Promotory (PGP)activity belong to Gram-negative group and among these fluorescent pseudomonads are the most widely studied (Duffy and Defago, 1999; Siddiqui and Shaukat, 2003). The ability of rhizosphere associated fluorescent pseudomonads to inhibit the growth of plant pathogenic fungi has generated interest in using them as crop protectants. In the present study fluorescent Pseudomonads were isolated from the rhizosphere region of tomato plants growing in the fields in Dehradun district of the state of Uttaranchal in northern India. Twelve such isolates were characterized according to Bergey's Manual of Determinative Bacteriology (Holt et al., 1994). All the twelve isolates were Gram-negative, non-spore forming rods and produced fluorescent and diffusible pigment on Pseudomonas fluorescein agar. All the biochemical and physiological characters confirmed that the twelve isolates belong to the genus Pseudomonas. Isolates were screened for the ability to produce different antifungal compounds including, siderophore, HCN, glucanases and chitinases. Pseudomonads were also screened for the production of plant growth promotory factors. Out of the twelve isolates, eight produced siderophore as confirmed by the production of orange halo around there colonies on CAS agar. Only four of the isolates produced hydrogen cyanide and nine produced IAA. Two of the isolates were capable of solubilizing phosphate, six were positive for chitinase and four for â-1,3-glucanase activity. Quantitatively, amongst all the isolates Pseudomonas NDN1 showed maximum chitinase and â-1,3-glucanase activity. Both the enzyme activities increased with time and reached maximum after 5 days of incubation in Kings B medium. All the isolates were tested in vitro conditions for the ability to inhibit Macrophomina phaseolina, causing charcoal rot in a number of plants, by dual culture method, according to Arora et al. (2001). Isolate NDN1 showed maximum antagonism activity against M. phaseolina, as well as maximum glucanase and chitinase activities. While isolates NDN5, NDN6, NDN8 and NDN9 showed no inhibition. NDN1 showed 80% and NDN7 71% inhibition of fungal growth, after 5 days of incubation, as compared to control. Cell walls of M. phaseolina are rich in chitins. Isolate NDN1 showed maximum chitin and glucanase production and this suggests its capability to lyse he cell wall of M. phaseolina as was further confirmed by scanning electron photographs of the fungi. Isolate Pseudomonas NDN1, was selected for further studies in vivo (pot) conditions on groundnut as test and host crop of M. phaseolina. Isolate NDN5 was taken as negative control. The in vivo experiment was designed with following treatments: (i) control (non-bacterized seeds and without fungi); (ii) soil + M. phaseolina (and non-bacterized seeds); (iii) soil + bacterized (NDN1) seeds; (iv) soil + bacterized seeds + M. phaseolina (v) soil + bacterized (NDN5) seeds (vi) soil + bacterized (NDN5) seeds + M. phaseolina. Five replicates of each set were taken. Plants were harvested after 60 days to measure percentage seed germination, disease incidence and seedling biomass. Seed germination percentage of ground nut enhanced considerably in presence of M. phaseolina, when coated with isolate NDN1, in comparison to non-bacterized and NDN5 coated seeds. After 60 days, plants raised from NDN1 bacterized seeds showed no signs of disease, in M. phaseolina infested soil. On the other hand plants from non-bacterized seeds and those bacterized with isolate NDN5 developed clear symptoms of charcoal rot, in presence of M. phasaeolina. The infected plants had black spots all over the surface and wilted with time. Seed bacterization with Pseudomonas NDN1 enhanced seedling biomass by 24 and 73% over uninfested and infested controls, respectively. Isolate NDN5 was also able to enhance the seedling biomass by 17.5% in comparison to uninfested control. However, in presence of M. phaseolina there was no increment instead plants showed clear symptoms of charcoal rot.