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Abstract Background Biocontrol is an effective strategy in the integrated management of plant diseases, now more as a necessity than choice, in the present era of environmental and health awareness. Microbial diversity is a wonder by nature that inspires to explore and accordingly, the diversity analysis of the isolated microbes revealed their morphological and molecular differences. The DNA provides a common platform to store the microbial information in the form of databases in public domain that can be used by anyone from anywhere. Results Exploration for native microbes in the present study resulted in isolation of different isolates of Trichoderma and Bacillus. The microbes were identified using morphological traits and molecular markers and the key conserved 18S and 16S gene sequences submitted with the appropriate repositories. Nucleotide analysis indicated a close phylogenetic relationship between BIK 2 and BIK 3 (Bacillus isolates) and within all the 5 Trichoderma isolates. The percent disease reduction of Rhizoctonia solani and Xanthomonas oryzae pv. oryzae (Xoo) was more in plants treated with consortia of the Trichoderma (61.13%) and Bacillus (53.59%) isolates, respectively. Screening of plant growth promotion activities, percentage increase in root (41.00%) and shoot length (44.77%) were found to be maximum in Trichoderma consortia treated plants. Conclusions Three Bacillus and one Trichoderma strains, viz., B. velezensis, B. subtilis and B. paralicheniformis and Trichoderma asperellum, were identified and found to be effective against R. solani and Xoo pathogens of rice. In vitro and in vivo studies indicated that TAIK1 and BIK3 were found to be the most potential isolates among others isolated. Ability to improve plant growth was more pronounced by consortia of microbes.