In this study, five endophytic bacterial strains, namely Rhizobium pusense (MS-1), Bacillus cereus MS-2, Bacillus flexus (MS-3), Methylophilus flavus (MS-4), and Pseudomonas aeruginosa (MS-5), were used to investigate their potential role in the enhancement of growth yields of two types of tomato varieties, viz. hybrid and local, and in the biosynthesis of silver nanoparticles (AgNPs). The inoculation of bacterial strains enhanced the root and shoot length, biomass, and leaf chlorophyll contents. The fruit weight of the tomato (kg/plant) was also higher in the bacteria inoculated plants of both hybrid and local varieties than in the control (untreated). A significant increase was recorded in the fruit yield (g/plant) in all the treatments, whereas Methylophilus flavus (MS-4) inoculated plants yielded nearly 2.5 times more fruit weight compared to the control in the hybrid variety and two times higher in the local variety. The response to M. flavus as a microbial inoculant was greater than to the other strains. Biosynthesis of Ag nanoparticles was also carried out using all five endophytic bacterial strains. The weakest producers of AgNPs were Rhizobium pusense (MS-1) and Methylophilus flavus (MS-4), while Bacillus cereus MS-2, Bacillus flexus (MS-3), and Pseudomonas aeruginosa (MS-5) were strong producers of AgNPs. Nanoparticles were further characterized using high-resolution scanning electron microscopy (HR-SEM), transmission electron microscopy (TEM), Fourier transform infrared (FTIR), UV-Vis spectrophotometry, and X-ray diffraction (XRD) analysis, and revealed cuboidal shaped AgNPs in the Bacillus cereus MS-2 strain. In addition, the biosynthesized AgNPs showed antibacterial activity against various pathogenic and endophytic bacterial strains.