The present research focuses to isolate, identify, characterize, screen and application of bacterial endophyte with antifungal potential against red rot causing pathogen Colletotrichum falcatum in sugarcane. Endophytic bacteria and C. falcatum were isolated from healthy roots and infected sugarcane plants respectively. MALDI-TOF MS was used to identify endophytic bacterial isolates from sugarcane roots and were screened for the antagonistic activity, hydrogen cyanide and siderophore production. The quantity of lipopeptides produced by different isolate was evaluated using HPLC and the efficient strain was selected, screened and employed for biocontrol of red rot in sugarcane under field conditions. Endophytes such as Bacillus, Enterobacter and Klebsiella were the predominant genera. Notably, Bacillus sp. SOE 7 inhibited C. falcatum mycelial growth by 62.25 %, showing high hydrogen cyanide production (15.68 µg mg-1) and lower siderophore production compared to Bacillus sp. SOE 1 and SOE 3. HPLC analysis revealed Bacillus sp. SOE 7 produced lipopeptides surfactin (2.05 mg L-1) and iturin (1.52 mg L-1), likely contributing to its antagonistic activity. Field application of this isolate significantly reduced disease incidence and increased cane yield compared to the control. The bacterial endophyte Bacillus subtilis SOE 7 isolated from sugarcane, exhibits maximum antifungal activity against the red rot pathogen C. falcatum and effectively controls the disease in the field.