Twenty-nine P. polymyxa strains isolated from rhizospheres of various crops were clustered into five genotypic groups on the basis of BOX-PCR analysis. The characteristics of several plant growth-promoting factors among the isolates revealed the distinct attributes in each allocated group. Under gnotobiotic conditions, inoculation of pepper roots with P. polymyxa isolates significantly increased the biomass in 17 of total 29 treated plants with untreated plants. Experiments on induced systemic resistance (ISR) against bacterial spot pathogen Xanthomonas axonopodis pv. vesicatoria in pepper by P. polymyxa strains were conducted and only one isolate (KNUC265) was selected. Further studies into ISR mediation by the KNUC265 strain against the soft-rot pathogen Erwinia carotovora subsp. carotovora in tobacco demonstrated that the tobacco seedlings exposed to either bacterial volatiles or diffusible metabolites exhibited a reduction in disease severity. In conclusion, ISR and plant growth promotion triggered by P. polymyxa isolates were systemically investigated on pepper for the first time. The P. polymyxa KNUC265 strain, which elicited both ISR and plant growth promotion, could be potentially used in improving the yield of pepper and possibly of other crops.