Plant growth promoting rhizobacteria (PGPR) has been identified as a group of microbes that are used for plant growth enhancement and biocontrol for management of plant diseases. The inconsistency in performance of these bacteria from laboratory to field conditions is compounded due to the prevailing abiotic stresses in the field. Therefore, selection of bacterial strains with tolerance to abiotic stresses would benefit the end-user by successful establishment of the strain for showing desired effects. In this study we attempted to isolate and identify strains of Bacillus and Pseudomonas spp. with stress tolerance and proven ability to inhibit the growth of potential phytopathogenic fungi. Screening of bacterial strains for high temperature (50°C), salinity (7% NaCl), and drought (-1.2 MPa) showed that stress tolerance was pronounced less in Pseudomonas isolates than in Bacillus strains. The reason behind this could be the formation of endospores by Bacillus isolates. Tolerance to drought was high in Pseudomonas strains than the other two stresses. Three strains, P8, P20 and P21 showed both salinity and temperature tolerance. P59 strain possessed promising antagonistic activity and drought tolerance. The magnitude of antagonism shown by Bacillus isolates was also higher when compared to Pseudomonas strains. To conclude, identification of microbial candidate strains with stress tolerance and other added characteristic features would help the end-user obtain the desired beneficial effects.