The aim of this study was to isolate bacteria from sea grass, Halodule uninervis collected from the coastal area of Jeddah, Saudi Arabia and to screen them for antifungal and enzymatic activities. We have isolated 162 rhizo and endophytic bacteria from soil, roots, and leaves of the sea grass. Antifungal screening of isolated bacteria revealed 19 strains (11.7%) capable to inhibit growth of four pathogenic fungi, Pythium ultimum, Phytophthora capsici, pyricularia oryzae, and Rhizoctonia solani in an in vitro assay. Taxonomic and phylogenetic analyses on the basis of 16S rRNA gene sequence revealed 97-99.9% sequence identity to recognized species. Bacillus, Staphylococcus, Jeotgalicoccus, and Planococcus, within the Phylum Firmicutes, Kocuria, Arthrobacter, Ornithinimicrobium and Corynebacterium (Actinobacteria), Sulfitobacter, Roseivivax, Ruegeria (α-Proteobacteria), Moraxella, and Vibrio (γ-Proteobacteria), were isolated. Strains belong to Phylum Firmicutes remain dominant antagonistic bacteria in this study. Further hydrolytic enzyme production was determined for these antagonistic bacteria. Our results demonstrated that the sea grass represents an important source of diverse antagonistic bacteria capable of producing antifungal metabolite.