Mungbean (Vigna radiata L. Wilczek) is an economically important legume crop grown across India. The growth and yield of the crop have been declining over the recent years due to climate change which leads to decrease in soil moisture. Applications of drought-tolerant plant growth-promoting (PGP) rhizobial strains have been found to enhance crop productivity under water deficiency. Therefore, the objective of this study was to screen the bacterial strains from the mungbean root nodule that may help in improving the plant growth under drought condition. Bacteria were isolated from mungbean root nodules and screened for in vitro drought-tolerance using different concentrations of PEG 6000 at 10, 20, 30 and 40 %, and temperature-tolerance at 30, 35, 40 and 45 °C. In primary screening, out of 98 root nodule bacterial isolates tested, only 25 % showed drought-tolerance at 40 % polyethylene glycol (PEG)-6000 while 22 % of bacteria survived at 45 °C. During secondary screening on combined stress-tolerance, only 8 % of isolates showed tolerance of 40 % PEG-6000 at 45 °C. The in vitro drought-tolerance of bacteria varied significantly according to their sampling region/district. Various PGP traits, i.e., nitrogen fixation, phosphate solubilization, and production of indole acetic acid, ammonia, and 1-aminocyclopropane-1-carboxylate (ACC) deaminase, were analyzed in isolated stress-tolerant bacteria, which may contribute towards stress-tolerance and crop productivity in mungbean. The most promising drought-tolerant nodule bacterial isolates were identified as Rhizobium sp. and Pseudomonas indica, respectively by 16S rRNA sequencing. Moreover, bacterial isolates MuJs52b, MuJs53b, MuJs72a and MuBk32b, which exhibited drought-tolerance of 40 % PEG-6000 and different PGP activities, were used as bioinoculant on mungbean plants grown under moderate to severe drought at 50 and 25 % of field capacity (FC) in pot experiment. Bacteria inoculated plants showed maximum increase in nodule dry weight (56.5 %) and shoot dry weight (87.5 %) per plant even under severe drought at 25 % FC. The results indicated that application of four potential nodule bacterial isolates, which were able to tolerate drought stress of 40 % PEG-6000, and having multiple PGP traits, showed stimulation of the mungbean growth even up to 25 % FC. These plant growth-promoting nodule bacterial strains may be used for the enhancement of mungbean crop productivity under drought stress and could be used as biofertilizer.