The presence of textile effluents in water bodies is a matter of concern due to toxicity caused by textile dyes, associated heavy metals and salts. Endophytic bacteria have been reported to reduce the phytotoxicity of textile wastewater (TWW) and improve crop potential. The purpose of this study was to sequester dye-degrading endophytic bacteria with the ability to remediate textile effluents and promote tomato plant growth. Six strains showing the highest dye decolorization were screened from the dye decolorization assay. Selected strains also showed plant growth-promoting traits and improved tolerance to heavy metals and salt. The results revealed that Enterobacter cloacae ZA14 showed the highest decolorization (90%) using 200 mg L−1 of dye concentration, high minimum inhibitory concentration (MIC) of heavy metals and improved salt tolerance. In a sand culture experiment, the T4 (25% TWW (consisting of 25 mL TWW with 75 mL distilled water) + ZA14) treatment showed an increase in root length (9.3%), shoot length (5.5%), improved chlorophyll contents (7%), and membrane stability index (5%), whereas maximum oxidative stress was indicated by T10 (100% TWW) with an increase of 122% in MDA and 80% in H2O2 as compared to T1. An increase of 41% in ascorbate peroxidase (APX), 37% increase in sodium oxide dismutase (SOD), 27% in peroxidase (POD), and 24% in catalase (CAT) by T4 treatment showed the least production of antioxidants as compared to plants receiving 50%, 75% and 100% TWW along with ZA14 application. These results suggested that 25% TWW is beneficial for crop production with the use of an appropriate approach like Enterobacter cloacae ZA14 to mitigate textile effluents efficiently and to improve crop production.