The present research work aims to demonstrate the rehabilitation of a degraded forest land by afforestation of sissoo plants (Dalbergia sissoo Roxb.) inoculated with nitrogen fixing bacteria sp. In this study, effects of the three different Rhizobium isolates from three localities such as i. Kotre-isolate, ii. Pokhara-isolate and iii. Syangaza-isolate were assessed both in nursery and in the field. It was noted that the growth and biomass increment of seedlings in nursery as well as in the field after rhizobial inoculation were significantly high compared to control one. Among these 3-isolates, Kotre-isolate was found to be superior to others. Soil improvement around the root of inoculated seedlings was remarkable high. Nitrogen content of the soil increased in the range of 20–40% compared to control (only 10–20%). Kotre-isolate, in general, caused more soil improvement than the other isolates. The nutrient content in the green foliage, particularly nitrogen, increased in the range of 30–50%, compared to control one. The considerable increase in nutrients content of soil as well as in the foliage indicates the improvement in the quality of site.