Plant growth-promoting endophytic microbes have drawn the attention of researchers owing to their ability to confer fitness benefits in many plant species. Here, we report agriculturally beneficial traits of rice-leaf-adapted endophytic Microbacterium testaceum. Our polyphasic taxonomic investigations revealed its identity as M. testaceum. The bacterium displayed typical endophytism in rice leaves, indicated by the green fluorescence of GFP-tagged M. testaceum in confocal laser scanning microscopy. Furthermore, the bacterium showed mineral solubilization and production of IAA, ammonia, and hydrolytic enzymes. Tobacco leaf infiltration assay confirmed its non-pathogenic nature on plants. The bacterium showed antifungal activity on Magnaporthe oryzae, as exemplified by secreted and volatile organic metabolome-mediated mycelial growth inhibition. GC-MS analysis of the volatilome of M. testaceum indicated the abundance of antimicrobial compounds. Bacterization of rice seedlings showed phenotypic traits of MAMP-triggered immunity (MTI), over-expression of OsNPR1 and OsCERK, and the consequent blast suppressive activity. Strikingly, M. testaceum induced the transcriptional tradeoff between physiological growth and host defense pathways as indicated by up- and downregulated DEGs. Coupled with its plant probiotic features and the defense elicitation activity, the present study paves the way for developing Microbacterium testaceum-mediated bioformulation for sustainably managing rice blast disease.