Biological nitrogen fixation (BNF) is highly effective in the field and potentially useful to reduce adverse effects chemical fertilisers. Here, Azotobacter species were selected via phenotypic, biochemical and molecular characterisations from different rice fields. Acetylene reduction assay of Azotobacter spp. showed that Azotobacter vinelandii (Az3) fixed higher amount of nitrogen (121.09 nmol C2H4 mg(-1) bacteria h(-1)). Likewise, its plant growth functions, viz. siderophore, hydrogen cyanide, salicylic acid, IAA, GA3, zeatin, NH3, phosphorus solubilisation, ACC deaminase and iron tolerance, were also higher. The profile of gDNA, plasmid DNA and cellular protein profile depicted inter-generic and inter-specific diversity among the isolates of A. vinelandii. The PCR-amplified genes nifH, nifD and nifK of 0.87, 1.4 and 1.5 kb , respectively, were ascertained by Southern blot hybridisation in isolates of A. vinelandii. The 16S rRNA sequence from A. vinelandii (Az3) was novel, and its accession number (JQ796077) was received from NCBI data base. Biofertiliser formulation of novel A. vinelandii isolates along with commercial one was evaluated in rice (Oriza sativa L. var. Khandagiri) fields. The present finding revealed that treatment T4 (Az3) (A. vinelandii) are highly efficient to improved growth and yield of rice crop.