Agriculture in the 21st century is facing multiple challenges, such as those related to soil fertility, climatic fluctuations, environmental degradation, urbanization, and the increase in food demand for the increasing world population. In the meanwhile, the scientific community is facing key challenges in increasing crop production from the existing land base. In this regard, traditional farming has witnessed enhanced per acre crop yields due to irregular and injudicious use of agrochemicals, including pesticides and synthetic fertilizers, but at a substantial environmental cost. Another major concern in modern agriculture is that crop pests are developing pesticide resistance. Therefore, the future of sustainable crop production requires the use of alternative strategies that can enhance crop yields in an environmentally sound manner. The application of rhizobacteria, specifically, plant growth-promoting rhizobacteria (PGPR), as an alternative to chemical pesticides has gained much attention from the scientific community. These rhizobacteria harbor a number of mechanisms through which they promote plant growth, control plant pests, and induce resistance to various abiotic stresses. This review presents a comprehensive overview of the mechanisms of rhizobacteria involved in plant growth promotion, biocontrol of pests, and bioremediation of contaminated soils. It also focuses on the effects of PGPR inoculation on plant growth survival under environmental stress. Furthermore, the pros and cons of rhizobacterial application along with future directions for the sustainable use of rhizobacteria in agriculture are discussed in depth.