Endophytic bacteria which show antagonism against phytopathogens were isolated from healthy tissues of leaves, stems and roots of chili pepper plants (Capsicum annum L.) in 2010-2011. Antifungal activities of all collected isolates were tested against plant pathogens by dual culture method. Pathogenic fungi used in this study were Alternaria panax, Botrytis cinerea, Colletrotichum acutatum, Fusarium oxysporum and Phytophthora capsici. A total of 283 bacteria were recovered and grouped into 44 morphogroups by observing the morphology on nutrient agar media. The isolation rate of endophytic bacteria in leaf, stem and root samples were 4.9%, 44.9% & 50.2%, respectively. 16S rDNA gene sequence analysis detected fourteen distinctive bacterial genotypes at >97% sequence similarity threshold. The most abundant genus was Pseudomonas followed by Bacillus and Burkholderia. A diverse range of other bacterial taxa were isolated and identified- Actinobacter, Arthrobacter, Enterobacter, Escherichia, Kitasatospora, Pandoraea, Pantoea, Rhizobium, Ralstonia, Paenibacillus, and Serratia. Dual culture antifungal activity indicated that 22 bacterial isolates (12%) inhibited at least one pathogenic fungus tested. Bacillus tequilensis (CNU082075), Burkholderia cepacia (CNU082111), Pseudomonas aeruginosa (CNU082137 and CNU082142) showed antifungal activity against all tested fungi. Crude extracts of selected isolates showed antifungal activity against Botrytis cinerea and among others the isolate CNU082111 performed strongest antifungal activity (inhibition zone >55 mm) by paper disk method.