Smut disease caused by Sporisorium scitamineum is emerging as a major threat to sugarcane cultivation in both tropical and subtropical India. The pathogen is primarily transmitted through sett, many times as deep seated latent infection that warrants a unique strategy to control the pathogen at the place of localization. Hence in this study an attempt was made to explore the potential of endophytic bacteria as a biocontrol agent for the management of smut disease. About 119 endophytic bacteria isolated from internode, bud and root were screened in vitro for their antagonist potential against S. scitamineum and among them eight exhibited strong antagonistic potential with > 30% mycelial growth inhibition. Testing of these eight antagonists for their biocontrol potential in two independent glass house experiments identified four endophytic bacterial strains viz., ESS 9, ESR 3, ESR 7 and ESR 21 as consistent performers. In experiment-I, these four bacteria exhibited 100% smut suppression, while in experiment-II they exhibited 49–62% reduction in smut incidence over control. Testing of these four endophytes for biocontrol potential in field under artificially pathogen-inoculated condition showed that endophytes treatment not only reduced smut incidence but also delayed the initial occurrence of disease by 60 days. In field trial, the least incidence of smut was recorded in ESR 7 (14.8%)- and ESR 21 (16.6%)-treated plants, i.e., more than 50% reduction in smut incidence over control. These two endophytes also showed potential in improving germination, number of millable canes, yield and juice quality parameters, viz. brix and sucrose. The endophyte B. pumilus ESR 21- and B. axarquiensis ESR 7-treated plants recorded the highest yield of 85.2 and 82.4 kg/plot, respectively, when compared to just 52.2 kg/plot in smut pathogen-inoculated control and 68.3 kg/plot in healthy control.