Stripe rust (caused by Puccinia striiformis tritici) is one of the most devastating diseases of wheat. The most effective ways to control stripe rust are the use of resistant cultivars and the timely use of an appropriate dose of fungicide. However, the changing nature of rust pathogen outwits the use of resistant cultivars, and the use of a fungicide is associated with environmental problems. To control the disease without sacrificing the environment, we screened 16 endophytic bacteria, which were isolated from stripe rust-resistant wheat cultivars in our previous study, for their biocontrol potential. A total of 5 bacterial strains Serratia marcescens 3A, Bacillus megaterium 6A, Paneibacillus xylanexedens 7A, Bacillus subtilis 11A, and Staphyloccus agentis 15A showed significant inhibition of Puccinia striiformis f. sp. tritici (Pst) urediniospores germination. Two formulations i.e., fermented liquid with bacterial cell (FLBC) and fermented liquid without bacterial cells (FL) of each bacterial strain, were evaluated against the urediniospores germination. Formulations of five selected endophytic bacteria strains significantly inhibited the uredinioospores germination in the lab experiments. It was further confirmed on seedlings of Pakistani susceptible wheat cultivar Inqilab-91 in the greenhouse, as well as in semi-field conditions. FLBC and FL formulations applied 24 h before Pst inoculation (hbi) displayed a protective mode. The efficacy of FLBC was between 34.45 and 87.77%, while the efficacy of FL was between 39.27 and 85.16% when applied 24 hbi. The inoculated wheat cultivar Inqilab-91 was also tested under semi-field conditions during the 2017–2018 cropping season at the adult plant stage. The strains Bacillus megaterium 6A and Paneibacillus xylanexedens 7A alone significantly reduced the disease severity of stripe rust with the efficacy of 65.16% and 61.11% for the FLBC in protective effect, while 46.07% and 44.47% in curative effect, respectively. Inoculated seedlings of Inqilab-91 showed higher activities of antioxidant enzymes, superoxide dismutase (SOD), peroxidase (POD), polyphenol oxidase (PPO), and phenylalanine ammonia-lyase (PAL). The treated seedlings also showed higher expressions of pathogenesis-related (PR) protein genes, antifungal protein (PR-1), β-1,3-endoglucanases (PR-2), endochitinases (PR-4), peroxidase (PR-9), and ribonuclease-like proteins (PR-10). These results indicated that endophytic bacteria have the biocontrol potential, which can be used to manage stripe rust disease. High production antioxidant enzymes, as well as high expression of PR protein genes, might be crucial in triggering the host defense mechanism against Pst.