Phytophthora capsici is one of the most devastating fungal pathogens, causing severe diseases that lead to economic loss in the pepper industry. As a result of the infections, the chemical approach is becoming more popular. Biological control, on the other hand, is better suited to controlling fungal pathogens. The biological control approach significantly reduces the problems associated with chemical applications while restoring natural environmental balance. As a result, the overall findings indicate that certain bacterial isolates play a beneficial role in lytic enzyme production and biocontrol activities against P. capsici. Bacterial isolates obtained from the pepper plants were screened for lytic enzyme and anti-oomycete activity against Phytophthora capsici in Ethiopia. Sixty bacterial isolates were isolated and tested against Phytophthora capsici. From these bacterial isolates, different inhibition zones and hydrolytic enzyme production were detected. Biochemical tests using an automated machine (MALDI-TOF, VITEK 2 compact and 16S rRNA) revealed that three of them, AAUSR23, AAULE41, and AAULE51, showed a high inhibition zone and high production of hydrolytic enzymes and were identified as Enterobacter cloacae (AAUSR23), Pseudomonas fluorescens (AAULE41), and undetermined (AAULE51). The effects of diffusable metabolite isolate AAULE51 has a 66.7% inhibition zone against Phytophthora capsici, followed by AAULE41 and AAUSR23, which have 59.7% and 14.1% inhibition zones, respectively. These bacterial isolates showed high production of hydrolytic enzymes like protease, cellulase, chitinase, and lipase (5-34 diameter of inhibition zone). As a result, the overall findings show that selected bacterial isolates play a beneficial role in lytic enzyme production and for their biocontrol activities against P. capsici.