Key message <p>Our findings suggest that the phytohormone salicylic acid, stimulated by <i>Bacillus megaterium</i> JPR68, plays a role in mitigating collar rot disease of Bhut Jolokia (<i>Capsicum chinense</i> Jacq.)</p> Abstract <p>Salicylic acid (SA) is a phytohormone that stimulates the plants immune response against various diseases. However, its function as a signaling molecule, particularly in relation to systemic acquired resistance (SAR) and induced systemic resistance (ISR), is still unclear. In this study, <i>Bacillus megaterium</i> JPR68 (BmJPR68) enhances the ISR of <i>Capsicum chinense</i> Jacq., resulting in elevated levels of SA within the plants. SA effectively inhibited the mycelial growth of <i>Rhizoctonia solani</i> and significantly reduced the necrosis, chlorosis, and collar rot in plants. The in vitro investigation revealed that the mycelial growth declined with increasing concentrations of SA and was completely inhibited at a concentration of 15&#xa0;mM. The pathogenicity assay showed that leaves and fruits treated with SA impeded hyphal development and significantly retarded the growth of <i>R. solani</i>. In split root techniques, more SA was accumulated in the root tissues at the bacterized site compared to the non-bacterized side, although this accumulation reduced after 45&#xa0;days. Additionally, the production of reactive oxygen species (ROS) was significantly diminished in plants treated with BmJPR68. SA production was assessed in both BmJPR68 and induced plants, indicating that the bacterial strain produced more SA compared to the induced plants. Fourier-transform infrared (FT-IR) analysis confirmed the presence of functional groups like O–H, N–H, S = O, C = C, C-N, and carboxylic/amine. The isoform of pathogenesis-related (PR) proteins was detected in the induced plants. This study provided valuable insights into SA induction using BmJPR68 to manage fungal disease in <i>Capsicum chinense</i> Jacq.&#xa0;during induced systemic resistance.</p>