Beneficial microorganisms have been considered as an important tool for crop improvement. Native isolates of Azospirillum spp. were obtained from the rhizospheres of different rice fields. Phenotypic, biochemical and molecular characterizations of these isolates led to the identification of six efficient strain of Azospirillum. PCR amplification of the nif genes (nifH, nifD and nifK) and protein profile of Azospirillum strains revealed inter-generic and inter-specific diversity among the strains. In vitro nitrogen fixation performance and the plant growth promotion activities, viz. siderophore, HCN, salicylic acid, IAA, GA, zeatin, ABA, NH3, phosphorus metabolism, ACC deaminase and iron tolerance were found to vary among the Azospirillum strains. The effect of Azospirillum formulations on growth of rice var. Khandagiri under field condition was evaluated, which revealed that the native formulation of Azospirillum of CRRI field (As6) was most effective to elevate endogenous nutrient content, and improved growth and better yield are the result. The 16S rRNA sequence revealed novelty of native Azospirillum lipoferum (As6) (JQ796078) in the NCBI database.