Abiotic stresses such as salinity, drought and excessive heat are associated with significant loss of crop productivity globally, and require effective strategies for their reduction or tolerance. Biofilm-forming rhizobacteria, which harbor multifarious plant growth promoting traits and tolerance to abiotic stress, are believed to benefit plant health and production even under environmental stresses. The primary objective of this study was to investigate indigenous biofilm-forming rhizobacteria (Pseudomonas spp., Bacillus sp., Pantoea sp., Brevibacterium sp. and Acinetobacter sp.) for their functional diversity relevant to plant growth promoting activities, biofilm development and tolerance to abiotic stress conditions. The most promising isolates among FAP1, FAP2, FAP3, FAP4, FAP5, FAP10, FAB1, FAB3 and FAA1 were selected. Rhizobacteria exhibited high tolerance to salinity (1.5 M NaCl) and drought stress (up to 55% PEG-6000) conditions in vitro. The isolates demonstrated varying levels of PGP activities (IAA production and phosphate solubilization), biofilm development, and production of alginate and exopolysaccharides in the presence of salinity, drought stress and elevated temperature. Further efficacy of the isolates was demonstrated by inoculating to wheat (Triticum aestivum L.) plants in greenhouse conditions under both normal and drought stress for up to 30 days inoculation. The plant growth potential of the isolates was in the order of FAP3 > FAB3 > FAB1 > FAP10 > FAP5 > FAP4 > FAA1 > FAP2 > FAP1. The present study resulted in successful selection of promising PGPR as identified by 16S rRNA gene sequence analysis. Field study is needed to evaluate their relative performance in both ‘normal’ and stressed environments in order to be exploited for plant stress management.