Straw returning, a core practice in conservation tillage, promotes sustainable intensification; however, it faces challenges such as inefficient decomposition, nutrient competition, and pathogen accumulation. To address these limitations, this study aimed to develop a multifunctional microbial consortium specifically designed for straw-incorporating cropping systems. The consortium comprises four Bacillus strains with complementary enzymatic systems, isolated from diverse ecological niches. It exhibited robust lignocellulolytic enzyme production, with manganese peroxidase (7709.33 U/L), laccase (450.65 U/L), endo-β-1,4-glucanase (154.67 U/mL), and filter paper activity (309.18 U/L). The consortium significantly enhanced rice straw degradation by 37.18% and increased nitrogen (N) release by 16.13% compared to the control. Moreover, the consortium exhibited a 67.56% inhibition rate against Magnaporthe oryzae and reduced both the incidence rate and disease index of leaf blast and panicle blast. Field trials revealed increases in the rice grain yield of 9.63% and 6.94% when applied alone and 6.75% and 5.18% when co-applied with straw residues. These findings highlight the multifunctional agricultural potential of the consortium and provide a sustainable strategy to overcome the limitations of straw-incorporating farming systems.