Fusarium wilt is a destructive disease affecting Bt cotton that is caused by Fusarium oxysporum f. sp. vasinfectum. This seed and soilborne disease pose a significant risk to Bt cotton production worldwide, including India. Therefore, to cope with this problem in an eco-friendly manner, we explored the potentiality of the rhizobacterial isolate possessing antifungal activity as a natural arsenal against the fungal pathogen fusarium wilt of Bt cotton. The rhizobacterial isolate RLS76 inhibited 85.39% of the fungal phytopathogen in the dual culture method. The RLS76 isolate's 16S rRNA partial gene sequence was determined to be Bacillus subtilis subsp. inaquosorum RLS76, with a closest phylogenetic affiliation of 99.53%. The crude extract of Bacillus subtilis subsp. inaquosorum RLS76 demonstrated 34.38% inhibition of the growth of the pathogen after a week of incubation by using an agar well diffusion method. Bacillus subtilis subsp. inaquosorum RLS76 produced volatile organic compounds that inhibited the fungal growth of phytopathogens by 54.84% in a closed environment. Also, GCMS analysis of the crude extract of Bacillus subtilis subsp. inaquosorum RLS76 identified four compounds, namely Pyrrolo[1,2-a]pyrazine-1,4-dione, hexahydro-; Pyrrolo[1,2-a]pyrazine-1,4-dione, hexahydro-3-(2-methylpropyl); 2,5-cyclohexadiene-1,4-dione, 2,5-Dihydroxy-3-methoxy-6-methyl-; 9,12-Octadecadienoic acid (Z,Z)-,phenylmethyl ester. Out of four compounds, three exhibit antimicrobial activity except 2,5-Dihydroxy-3-methoxy-6-methyl. The RLS76 strain of Bacillus subtilis subsp. inaquosorum displayed a transition in hue, shifting from blue to orange, surrounding the colony on CAS medium by producing siderophore qualitatively. The quantitative siderophore produced in the crude extract was 86.06 SU after 60-72 h of incubation. The RLS76 strain of Bacillus subtilis subsp. inaquosorum also showed the ability to produce a proteolytic enzyme outside the cell. This enzyme caused a noticeable clear zone around the colony when the bacteria were grown on a skim-milk agar plate. The Bacillus subtilis subsp. inaquosorum RLS76 also exhibited phosphate solubilization activity with the clear halo around the colonies on NBRIP medium. All these results suggest that Bacillus subtilis subsp. inaquosorum RLS76 exhibits good biocontrol as well as a plant growth promoting candidate against the phytopathogen of Fusarium wilt of Bt cotton.