Plant growth promoting rhizobacteria (PGPR) exhibit direct and indirect mechanisms as plant growth promoters and biological control agents. Sponge associated microbes rich in bioactive metabolites. P.fluorescens BCPBMS-1 was isolated from the sponge Callysspongia diffusa . P.fluorescens BCPBMS-1 having antagonistic activity against Fusarium oxysporum. It was observed by using cross streak method. In blotting paper test more number of seeds were found to germinate when P. fluorescens was inoculated along with the Fusarium oxysporum, the pathogen. Out of 50 seeds treated P. fluorescens and Fusarium oxysporum, 48 seeds germinated, 50 seeds treated with F. oxysporum, only 5 seeds were germinated. The antagonistic effect of P.fluorescens was confirmed also by in vitro. P.fluorescens also having phosphate solubilizing activity. PGPR activity was remarkable in pot culture experiment. Seed lings with P.flurorescens grew fastly compared to control. In the present observation pHof the uninoculated P. fluorescens soil sample was 7.5. while pH of the inoculated P. fluorescens was 7.1. Available nitrogen was 6.4 mg/g for uninoculated P. fluorescens soil sample whereas 7.2 mg/g was observed with P. fluorescens inoculated soil. Available phosphorus was maximum in P. fluorescens inoculated soil 12.0mg/g, whereas in P. fluorescens uninoculated soil sample available phosphorus content was only 8.0mg/g. These results endorsed P.fluorescens BCPBMS-1 can be used as biofertilizer.