Sheath blight disease is a fungal pathogen that causes leaf blight in rice plants, resulting in significant yield losses throughout the growing season. Pseudomonas spp. have long been used as biocontrol agents for a variety of plant diseases. Four Pseudomonas isolates were tested for their ability to promote rice growth and generate systemic resistance to Rhizoctonia solani, the causal pathogen of sheath blight disease. In vitro, Pseudomonas isolates produced the growth hormone indole acetic acid (0.82–1.82 mg L−1). Additionally, seed treatment with Pseudomonas putida suspension outperformed P. brassicacearum, P. aeruginosa and P. resinovorans in terms of germination and vigor evaluation. The maximum seed germination of 89% was recorded after seed treatments with a fresh suspension of P. putida, followed by 87% germination in P. aeruginosa treatment, compared with only 74% germination in the untreated controls. When compared with the infected control plants, all Pseudomonas isolates were non-pathogenic to rice and their co-inoculation considerably enhanced plant growth and health by reducing the disease index to 37% and improving plant height (26%), fresh weight (140%) and dry weight (100%). All Pseudomonas isolates effectively reduced sheath blight disease incidence, as well as the fungicide carbendazim, which is recommended for field management of R. solani. In comparison to untreated control seedlings, treatment with Pseudomonas isolates enhanced the production of peroxidase and polyphenol oxidase enzymes and the expression of the phenylalanine ammonia lyase (PAL) and NPR1 genes, which could be involved in disease incidence reduction. In conclusion, the use of Pseudomonas spp. has been demonstrated to improve rice growth and resistance to R. solani while also providing an environmentally acceptable option to the agroecosystems.