Phytophthora capsici infection of chili pepper seedlings can cause substantial losses due to damping-off and collar rot diseases. Chemical control is no longer effective due to reported resistance development, on top of the related environmental concerns and the consumer demands for reduced use of fungicides. Biological control is a sustainable option, with several agents having been reported to be effective against this pathogen. This research focused on optimizing the application of strain THSW13 of Trichoderma hamatum and a bacterial isolate BJ10-86 with the objectives of improving chili pepper seed germination, reduce damping-off disease incidence, and improve the growth of the seedlings. Bacterial isolate BJ10-86 was subjected to molecular identification and found to be Pseudomonas aeruginosa. Chili pepper seeds treated with the biocontrol agents, individually or in combination, were seeded into commercial nursery media that had been pre-inoculated with P. capsici zoospores. Over a period of 35 days the chili pepper seed treatments significantly (P = 0.008) reduced the disease incidence of seedlings damping-off. Combined application of T. hamatum and P. aeruginosa was the best biocontrol treatment with an area under disease curve of only 36.61 units compared to 92.87 units for the control treatment. Similar results were observed in vitro where T. hamatum and P. aeruginosa synergistically inhibited P. capsici growth by 73.2 %. The inhibition activity of this treatment was similar to mefenoxam treatment, which implies that it is an effective and sustainable alternative for chili pepper seed treatment. The biocontrol seed treatment had no effect on seed germination and seedling growth.