Endophytic bacteria form a symbiotic relation with plants and generally cause no harmful effects to the host plants. In a previous study, we isolated eight bacterial endophytes from sweet potato plants harvested in Salyan, Nepal. These endophytes showed plant growth-promoting properties as a mixed culture. In this study, we evaluated the ability of these strains to produce indole-3-acetic acid (IAA) and to fix nitrogen. Based on these results, we selected two strains, Klebsiella sp. Sal 1 and Enterobacter sp. Sal 3, and evaluated their ability to promote plant growth. IAA production activity peaked at 15–60 mg NH4NO3/L in plant-free medium. Similarly, acetylene reduction activity peaked at 0–6.25 mg NH4NO3/L. Both strains successfully colonized plants, promoted the growth of tomatoes, and induced phenotypes in plants consistent with IAA exposure. This suggests that these strains promote plant growth by producing IAA inside the plant, where nitrogen levels are expected to be low.