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Grass pea (Lathyrus sativus L.) is widely cultivated for food and feed in some developing countries including Ethiopia. However, due to its overexaggerated neuro-lathyrism alkaloid causing paralysis of limbs, it failed to attract attention of the research community and is one of the most neglected orphan crops in the world. But, the crop is considered an insurance crop by resource-poor farmers due to its strong abiotic stress tolerance and ability to produce high yields when all other crops fail due to unfavorable environmental conditions. This study was aimed at screening rhizobial isolates of grass pea and evaluating their symbiotic nitrogen fixation efficiency and tolerance to abiotic stresses. Fifty rhizobial isolates collected from grass pea nodules were isolated, screened, and characterized based on standard microbiological methods. The rhizobial isolates showed diversity in nodulation, symbiotic nitrogen fixation, and nutrient utilization. The 16S rRNA gene sequencing of 14 rhizobial isolates showed that two of them were identified as Rhizobium leguminosarum and the remaining twelve as Rhizobium species. Based on their overall performance, strains AAUGR-9, AAUGR-11, and AAUGR-14 that performed top and identified as Rhizobium species were recommended for field trials. This study screened and identified effective and competitive rhizobial isolates enriched with high nitrogen-fixing and abiotic stress tolerant traits, which contributes much to the application of microbial inoculants as alternative to chemical fertilizers.