Bacterial inoculants are used as alternative biofertilizers due to their ability to solublize phosphate and increase plant growth parameters. Laboratory and pot experiments were conducted at microbiology laboratory and Rare, Haramaya University respectively with the objective of isolating phosphate solubilizing rhizobacteria(PSB) from rhizosphere soil of faba bean and ground nut plants and examining their ability to solubilize phosphate. A total of 30 PSB isolates were collected from Babille, Meta and Haramaya University farm lands. The laboratory experiment was based on bioassay in order to assess the seed germination percentage and seedling growth; to measure the zone of clearance for effective PSB as well as to examine their ability to produce Indole Acetic Acid(IAA), and the experimental design was (CRD) with factorial arrangements and three replications. Isolate PSB20 (6.250) showed the maximum solubilization index (SI), and PSB25 has the lowest SI (4.667) and PSB20 (2.967ppm) showed the highest IAA production as compared to PSB25 (2.197ppm).