Biofertilizer is a relatively safer, environmentally friendly and cost-effective approach as an alternative to reduce chemical fertilizer usage. The selection of bacterial strains with multiple beneficial characteristics are important to maximize the effectiveness on the host plant. Due to aforementioned interest, several Plant Growth-Promoting Rhizobacterial (PGPR) and rhizobial strains were isolated from rice and legume roots, respectively, at four locations in Malaysia namely Universiti Putra Malaysia (UPM), Serdang, Selangor; Besut, Terengganu; Tunjung, Kelantan and Sik, Kedah. Bacterial isolations were undertaken to select the best isolates which exhibit multiple beneficial effects to the rice plant and a total of 205 bacterial strains were isolated and categorized as follows; 94 rhizospheric and 107 endophytic bacteria from rice roots, one rhizobial strain from soybean and three from Mimosa pudica. These isolates were screened for their abilities to fix N 2 and solubilize phosphate; 52 were positive for both tests. The selected isolates were then tested for IAA production and other biochemical tests such as potassium solubilization, hydrolyzing enzymes (cellulase and pectinase) and iron siderophore productions. Four isolates, namely UPMB19 (rhizospheric PGPR from Tunjung, Kelantan), UPMB20 (endophytic PGPR from Besut, Terengganu), UPMR30 (rhizobia from soybean) and UPMR31 (rhizobia from Mimosa) were selected for subsequent plant inoculation tests with UPMB10, a PGPR isolated from oil palm root, as the reference strain. Based on 16S rDNA gene sequencing, these bacterial strains were identified under several genera: Lysinibacillus, Alcaligenes, Bradyrhizobium, Rhizobium and Bacillus, respectively. Results of plant inoculation test indicated that UPMB19 significantly enhanced the seedling height at the early growth stage (7 days after transplanting, DAT) which could be attributed to the higher N 2 fixation rate of this strain as compared to the other strains, except UPMB20. UPMB10 and UPMR31 also showed significant effects with increased seedling height and Total Dry Weight (TDW) at the later stage (14 DAT) possibly due to the higher bacterial population and IAA produced as observed in the residual nutrient solution without addition of fertilizer-N. This study has successfully demonstrated the effectiveness of locally isolated PGPR and rhizobial strains with multiple beneficial characteristics on early growth and vigor of rice seedlings under controlled condition. The result proved to be a vital information in the development of a liquid biofertilizer for rice; thus further studies will be done to evaluate the effectiveness of these isolates under glasshouse and field conditions on growth, tillering and yield of rice.