Pepper is vulnerable to soil-borne fungal pathogens such as Rhizoctonia solani and Fusarium oxysporum. The potential of beneficial rhizosphere microorganisms to control R. solani and F. oxysporum f.sp. capsici was evaluated in pepper plants. Paenibacillus polymyxa and Trichoderma longibrachiatum were isolated from rhizospheric soil samples of healthy pepper plants. In vitro, both isolates caused clear reductions in the radial growth of root rot and wilt pathogens. Scanning electron microscopy displayed lysis and abnormal shape of the pathogens in dual cultures with P. polymyxa and T. longibrachiatum. The incidence and severity of root rot and wilt diseases were significantly reduced in pepper plants treated with the growth-promoting fungi (PGPF isolates; Fusarium equiseti GF19-1, Fusarium equiseti GF18-3, and Phoma sp. GS8-3), P. polymyxa, or T. longibrachiatum in comparison to the control. Moreover, the induction treatments led to increased pepper growth compared with their control. The defense related gene (CaPR4) expression was shown to be significantly higher in the treated plants than in the control plants. In conclusion, the antagonistic isolates (P. polymyxa and T. longibrachiatum) and PGPF isolates have a clear impact on the prevention of root rot and wilt diseases in pepper plants incited by R. solani and F. oxysporum f.sp. capsici. The expression of the CaPR4 gene added to the evidence that PGPF isolates generate systemic resistance to pathogen infections.