Some plant rhizosphere bacteria can secrete indoleacetic acid (IAA) to promote the plant growth and increase crop yield. This research aimed to screen IAA-producing strains from rhizosphere of peanut in sandy soil, and to analyze their promoting effect. 5 IAA-producing strains were isolated from rhizosphere of a healthy peanut plant. Among them, strain HS10 had the highest IAA-production ability and was identified as Bacillus tequilensis by 16S rRNA gene sequencing combined with its physiological and biochemical evaluation. HS10 produced maximum IAA at 24h of incubation with optimum conditions as 30℃, pH8, fluid volume 25 mL/250 mL, fructose and potassium nitrate as carbon source and nitrogen source respectively. Pot experiment demonstrated that HS10 significantly promoted plant growth and root system of peanut compared to the control.