All the antagonist isolates obtained from rice seeds showed in vitro inhibitory effect on Sarocladium oryzae ranging from 10.90 to 82.18 per cent. Bacillus subtilis isolate 9 was found to be highly effective in inhibiting the mycelial growth of S. oryzae by 82.18 per cent. The biocontrol agents significantly reduced S. oryzae seed infection and increased seed germination and seedling vigour. Field trials conducted at four different locations indicated that the seed-borne S. oryzae in rice could be successfully managed by seed treatment followed by foliar application at boot leaf stage with B. subtilis (or) P. fluorescens.