A total of 114 morphologically different bacteria were isolated from the rhizosphere of drought tolerant mustard cultivar DRMR 2352 using various media. Out of these 114 rhizobacterial isolates screened for osmotolerance, 14 isolates showed higher growth in presence of osmotic stress and were able to grow in nutrient broth supplemented with 40% PEG 6000. These 14 osmotolerant bacterial isolates were evaluated for their alleviation of water stress in drought susceptible mustard cultivar Pusa Karishma LES-39. Under in vitro conditions there was an increase in percent germination and seedling vigour of inoculated mustard seedling as compared to uninoculated control treatment exposed to water stress. A pot experiment conducted under water stress conditions revealed positive effect of inoculation with osmotolerant bacteria on shoot and root fresh weight, shoot and root dry weight of mustard. Nearly all the plants inoculated with osmotolerant bacterial isolates were observed to have significantly higher water content in shoots and improved water use efficiency under water stress conditions. However, there was no effect on water content of roots of inoculated plants. Isolate NA D7 was observed to be the most promising culture for water stress alleviation in mustard.