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Background: Indole-3-acetic acid (IAA), a principal phytohormone, controls several crucial physiological processes of plants. It ameliorates plant growth by stimulating cell elongation, root initiation, seed germination and seedling growth. Alteration of IAA level by plant growth promoting rhizobacteria leads to varied impacts on plant growth and development. Methods: Soil samples were collected from bamboo (Bambusa tulda, B. nutans subsp. cupulata, B. balcooa and Dendrocalamus strictus) rhizosphere. Altogether five bacterial isolates were screened by serial dilution method and subjected to biochemical analysis. The isolate BUX1 with high IAA production capacity was optimized for IAA production. IAA was partially purified and quantified from the bacterial extract by thin layer chromatography (TLC). The influence of extracted bacterial IAA on chlorophyll biosynthesis in bamboo seedlings of B. tulda was compared with uninoculated control plants. Results: Biochemical analysis revealed that all the isolates belonged to genus Bacillus which were found capable of producing IAA. During optimization, BUX1 isolate produced 99.13 µg ml-1 of IAA at 37°C, pH 7, 3 mg l-1 concentration of L-tryptophan and 150 rpm agitation rate after 192 hour of incubation. The Rf value of the bacterial IAA during TLC was identical to that of standard IAA (0.425) indicating that IAA was present in crude extract of Bacillus (BUX1). The influence of bacterial IAA on chlorophyll biosynthesis in bamboo seedlings was significant in comparison to uninoculated plants. Therefore, this isolate could be a prospective candidate to be employed as biofertilizer.