Phytophthora capsici is a notorious fungus which infects many crop plants at their early and late growth stages. In the present study, twelve P. capsici isolates were morphologically characterized, and based on pathogenicity assays; two highly virulent isolates causing post-emergence damping-off on locally cultivated chilli pepper were screened. Two P. capsici isolates, HydPak1 (MF322868) and HydPk2 (MF322869) were identified based on internal transcribed spacer (ITS) sequence homology. Plant growth promoting rhizobacteria (PGPR) play a significant role in disease suppression and plant growth promotion in various crops. Out of fifteen bacterial strains recovered from chilli rhizosphere, eight were found potential antagonists to P. capsici in vitro. Bacterial strains with strong antifungal potential were subjected to biochemical and molecular analysis. All tested bacterial strains, were positive for hydrogen cyanide (HCN), catalase production and indole-3-acetic acid (IAA) production (ranging from 6.10 to 56.23 µg ml-1), while siderophore production varied between 12.5 and 33.5%. The 16S rRNA sequence analysis of tested bacterial strains showed 98-100% identity with Pseudomonas putida, P. libanensis, P. aeruginosa, Bacillus subtilis, B. megaterium, and B. cereus sequences available in the National Center for Biotechnology Information (NCBI) GenBank nucleotide database. All sequences of identified bacteria were submitted to GenBank for accessions numbers (MH796347-50, MH796355-56, MH801129 and MH801071). Greenhouse studies concluded that all tested bacterial strains significantly suppressed the P. capsici infections (52.3-63%) and enhanced the plant growth characters in chilli pepper. Efficacy of many of these tested rhizobacteria is being first time reported against P. capsici from Pakistan. Plant growth promoting rhizobacteria (PGPR) exhibiting multiple traits may be used in the development of new, eco-friendly, and effective bioformulations as an alternative to synthetic fungicides.