Biological control of major rice diseases has been attempted in several rice-growing countries in Asia during the last few decades and its application using antagonistic bacteria has proved to be somewhat successful for controlling various fungal diseases in field trials. Two novel endophytic Bacillus species, designated strains YC7007 and YC7010, with anti-microbial, plant growth-promoting, and systemic resistance-inducing activities were isolated from the roots of rice in paddy fields at Jinju, Korea, and their multifunctional activities were analyzed. Strain YC7007 inhibited mycelial growth of major rice fungal pathogens strongly in vitro. Bacterial blight and panicle blight caused by Xanthomonas oryzae pv. oryzae (KACC 10208) and Burkholderia glumae (KACC 44022), respectively, were also suppressed effectively by drenching a bacterial suspension (10 cfu/ml) of strain YC7007 on the rhizosphere of rice. Additionally, strain YC7007 promoted the growth of rice seedlings with higher germination rates and more tillers than the untreated control. The taxonomic position of the strains was also investigated. Phylogenetic analyses based on 16S rRNA gene sequences indicated that both strains belong to the genus Bacillus, with high similarity to the closely related strains, Bacillus siamensis KACC 15859 (99.67%), Bacillus methylotrophicus KACC 13105 (99.65%), Bacillus amyloliquefaciens subsp. plantarum KACC 17177 (99.60%), and Bacillus tequilensis KACC 15944 (99.45%). The DNA-DNA relatedness value between strain YC7010 and the most closely related strain, B. siamensis KACC 15859 was 50.4±3.5%, but it was 91.5±11.0% between two strains YC7007 and YC7010, indicating the same species. The major fatty acids of two strains were anteiso-C;sub>15:0;/sub> and iso C;sub>15:0;/sub>. Both strains contained MK-7 as a major respiratory quinone system. The G+C contents of the genomic DNA of two strains were 50.5 mol% and 51.2 mol%, respectively. Based on these polyphasic studies, the two strains YC7007 and YC7010 represent novel species of the genus Bacillus, for which the name Bacillus oryzicola sp. nov. is proposed. The type strain is YC7010 (= KACC 18228). Taken together, our findings suggest that novel endophytic Bacillus strains can be used for the biological control of rice diseases.