Background: Seed borne endophytic fungi play an important role in seed germination and plant health. There are ubiquitous and have been found associated in every plant species investigated so far. They colonize plant seeds without causing any disease and are often vertically transmitted. Despite their occurrence, seed borne endophytic fungi are poorly investigated and their role for application in agriculture is still to be elucidated. Methods: In the present study endophytic fungi associated with seeds of some indigenous rice varieties of North East, India was investigated. The isolates were determined for IAA activity in-vitro and antifungal activity against rice pathogen, Magnaporthe grisea. Crude metabolites obtained from potent isolates were characterized by GCMS analysis to reveal the presence of bioactive compounds. Result: Our result indicated that commonly isolated fungal genera were Aspergillus, Fusarium, Gliocladium, Mucor, Penicillium, Bipolaris, Basidiobolus and Mycelia sterilia. Amongst them, colonization frequency (CF %) of Fusarium (8.8%) was found to be highest and was isolated from seeds of almost all the varieties. It was observed that four isolates of Fusarium showed good IAA production in the medium amended with tryptophan. The isolates also displayed antifungal activity against Magnaporthe grisea. GCMS analysis of the metabolites indicated presence of several bioactive compounds. The study suggests that seed borne endophytes can be explored as bio-inoculants for crop improvement in future research program.