Biotic stresses in plants have a significant impact on agricultural productivity. In the present study, in vivo experiments were conducted to determine the physiological responses of tomato (Solanum lycopersicum L.) seedlings by inoculation with an endophytic actinobacterium, Streptomyces thermocarboxydus isolate BPSAC147 under greenhouse conditions. Further, photochemical quantum yield of photosystem II (PSII) (Fv/Fm), photochemical quenching (qP) and non-photochemical (NPQ) were calculated in seedlings inoculated with S. thermocarboxydus (T1) and were compared with control (T0) plants. Furthermore, the electron transport rate (ETR) of PSII exhibited a significant increase in T1 plants, relative to T0 plants. These results indicate that inoculation of tomato seedlings with S. thermocarboxydus had a positive effect on the process of photosynthesis, resulting in enhanced chlorophyll fluorescence parameters due to increased ETR in the thylakoid membrane. GC-MS analysis showed significant differences in the volatile compounds in the different treatments performed under greenhouse conditions. The present study suggests that S. thermocarboxydus can be used as new biocontrol agent to control Fusarium wilt in tomato crops and enhance productivity by enhancing photosynthesis.