A total of 162 bacteria were isolated from rhizosphere of tef [Eragrostis tef (Zucc.) Trotter] andrncharacterized. Sixty six isolates were considered as plant growth-promoting rhizobacteriarn(PGPR) as determined by their plant growth promoting characteristics (Phosphate solubilization,rnantibiotic and HCN production) and further characterized by several morphological,rnphysiological and biochemical tests and identified to species level using API kit method.rnNumerical analysis of phenotypic data by a computer cluster analysis using UPGMA (NTSYSpcrnsoftware version 2.1) was done based on carbohydrate fermentation profile. Four isolatesrn(AURB15, AURB34, AURB56 and AURB65) were also selected and inoculated on to two tefrnvarieties (DZ-Cr-37 and DZ-01-974) at greenhouse condition to evaluate their effect on growthrnperformance and yield of the tef varieties. The isolates displayed diverse morphological,rnphysiological, biochemical and PGPR characteristics. Most of them were tolerant to wide rangernof temperature, pH and NaCl. The 66 isolates were found to belong to 7 genera and 15 species.rnAnalysis of phenotypic data revealed that at boundary levels of 50% average similarity, twornmajor clusters were formed by both Gram-negative and positive isolates while the respectiverngroups form six and seven clusters at about 75% and 78.4% average similarity. Isolate AURB15rn(Pseudomonas fluorscens) was observed to significantly increase mean root dry weight (39%),rnroot shoot ratio (42%) and yield (45%) of the tef variety DZ-Cr-37; like wise isolate AURB65rn(Bacillus subtilis) better increased mean root dry weight (28%), root shoot ratio (19%) and yieldrn(44%) of tef variety DZ-01-974 compared to the control groups. Inoculation of all the fourrnisolates resulted in comparable mean shoot dry weight with the control groups (p > 0.05). Wherernas inoculation of two isolates, AURB34 (Burkholderia cepacia) and AURB56 (Bacillusrncoagulans) on DZ-01-974 failed to increase mean root dry weight, root shoot ratio and yield ofrnDZ-01-974. No significant variation of percentage nitrogen and total protein was observed byrninoculation (p > 0.05). The increase in mean root dry weight, root shoot ratio and yield of tefrnvarieties DZ-Cr-37 and DZ-01-974 by AURB15 (Pseudomonas fluorscens) and AURB65rn(Bacillus subtilis) suggests that the isolates have better potential for further field testing andrnapplication in improving yield of the tef varieties.