The current investigation gives insights into a comparative analysis of bacterial endophyte Bacillus subtilis M-4 (BS) and chemical fungicide (CF) for disease management of charcoal rot in soybean. BS shows mycelial growth inhibition of Macrophomina phaseolina (MP) during in vitro conditions. Upon BS application significant changes were observed in the plants at their physiological, histological, and molecular levels as compared to the chemical fungicide under greenhouse conditions. Moreover, BS treatment suppresses the charcoal rot disease in soybean by reducing the stress markers viz; LPx (53.34%) and elevated the TFC (14.28%), TPC (47.01%), ROS scavenging activities such as DPPH (55.05%), ABTS during MP infection. The SOD, PO, CAT, APx, and PPO activities were enhanced in BS + MP-treated plants as compared to MP and CF + MP plants. These results were further corroborated by the detection of cellular damage, deposition of superoxide radicals (H2O2, O2-), ROS, and lignin only in MP and CF + MP plants. Additionally, BS also improves the physiological attributes such as rate of photosynthesis, leaf transpiration, and stomatal conductance of soybean as compared to MP and CF + MP treatments. Furthermore, the histochemical analysis showed a higher accumulation of callose, and qRT-PCR results validated the up-regulation of defense-responsive gene expression in BS-treated plants during MP infection. Higher up-regulation was observed in PR-4, PR-1, WRKY59, MYC2, ChAI, WRKY1, FLS1, SBP65, NPR1-2, and ERF (4.74, 2.97, 0.51, 0.92, 2.70, 10.50, 11.38, 7.23, 7.55, 3.84 log2 fold change) in BS + MP-treated plants. The results suggest that BS has the potential to be used as a bioprotectant, and an alternative to CF in an eco-sustainable manner for charcoal rot disease management in soybean.Graphical Abstract Schematic presentation of BS and CF effect on soybean during charcoal rot disease. Created with BioRender.com (acceded on 14 March 2022).