Tanjong Karang is a rice growing area in Malaysia. Soil belongs to inceptisol order, pH around 4.5-5.0 and harbors a diverse group of nitrogen fixing bacteria. Beside nitrogen-fixing activity these diazotrophs produced phytohormones especially, indoleacetic acid which enhanced extensive root architecture and help plant to acquire more nutrients from the surrounding area. Higher population of diazotrophs found in the rhizosphere as plant root exudates provides required carbon sources for nitrogen fixation and growth of the bacteria. Diazotrophs have preferences of carbon source utilization. Plant-diazotroph association largely depends on root exudates. Application of preferred carbon sources increased diazotroph population and nitrogen fixation. Availability of preferable carbon sources increased biological nitrogen fixation and fulfilled about 40 percent of total plant nitrogen requirements. Plant inoculated with these diazotrophs increased total biomass and photosynthesis.These diazotrophs have potential to be used as biofertilizer.