Thirty bacterial strains were isolated from the rhizosphere of plants collected from Egypt and screened for production of chitinase enzymes. Bacillus thuringiensis NM101-19 and Bacillus licheniformis NM120-17 had the highest chitinolytic activities amongst those investigated. The production of chitinase by B. thuringiensis and B. licheniformis was optimized using colloidal chitin medium amended with 1.5% colloidal chitin, with casein as a nitrogen source, at $30^{circ}C$ after five days of incubation. An enhancement of chitinase production by the two species was observed by addition of sugar substances and dried fungal mats to the colloidal chitin media. The optimal conditions for chitinase activity by B. thuringiensis and B. licheniformis were at $40^{circ}C$, pH 7.0 and pH 8.0, respectively. $Na^+$, $Mg^{2+}$, $Cu^{2+}$, and $Ca^{2+}$ caused enhancement of enzyme activities whereas they were markedly inhibited by $Zn^{2+}$, $Hg^{2+}$, and $Ag^+$. In vitro, B. thuringiensis and B. licheniformis chitinases had potential for cell wall lysis of many phytopathogenic fungi tested. The addition of B. thuringiensis chitinase was more effective than that of B. licheniformis in increasing the germination of soybean seeds infected with various phytopathogenic fungi.