Traditionally, diseases have been managed with synthetic chemicals, but concerns over their environmental and health impacts have led to increased interest in biological control methods as sustainable alternatives. This study explores the potential of the seed-borne endophytes for eco-friendly biological control agent against brown spot Bipolaris oryzae (Breda de Haan) and sheath blight disease (Rhizoctonia solani Kuhn) in rice. The findings revealed that B. subtilis RE-1 effectively reduced the mycelial growth of brown spot and sheath blight pathogen up to 46.27% and 40.37%, respectively under in vitro conditions. Endophytes produced extracellular hydrolytic enzymes viz., amylase, protease, cellulase and lipase that degrade fungal mycelia. Additionally, B. subtilis RE-1 synthesized antimicrobial peptides (AMPs) including Iturin (C, D), Bacilysin, Fengycin D, Mycosubtilin, Bacillomycin (A,D) and hydrolytic enzymes viz., β-glucanase, which collectively demonstrated potent antimicrobial and antifungal activities. The identification of six antimicrobial lipopeptides genes and one hydrolytic enzyme gene in seed-borne endophytes is a novel finding of this study, highlighting its comprehensive disease-fighting potential. Furthermore, B. subtilis enhances seed germination rates to 96% and increases the vigor index to 1574.784, compared to the control seeds with 92% germination and a vigor index of 1393.984. The augmentation of seedling growth can be attributed to the release of IAA, siderophore and ammonia utilization. These findings underscore B. subtilis as a promising endophyte that could enhance rice production sustainably.