Six isolates of Trichoderma spp. were identified based on the morphological characteristics and species determination was performed by molecular assays. One of the isolated strains determined as Trichoderma erinaceum outperformed others. Trichoderma erinaceum controlled three soil borne plant pathogens i.e. Rhizoctonia solani, Sclerotium rolfsii and Sclerotium oryzae effectively under controlled condition and R. solani and Helminthosporium oryzae under filed condition. Seed treatments with the formulated isolates improved the germination rate of rice and enhanced vigour. These parameters along with higher chlorophyll content could be related to higher yield observed in two rice varieties; Karuna and Sahabhagidhan. Among the six isolates tested, Trichoderma erinaceum treatment recorded highest yield. Significantly higher expression of some stress related enzymes was observed in Trichoderma treated plants which helped in better crop growth both under biotic and abiotic stresses. These isolates helped both the varieties to accumulate more nutrients. This study proves that Trichoderma erinaceum obtained from tree bark may be incorporated in integrated rice crop management both as biocontrol agent and biofertilizer.