Rice (Oryza sativa L.) is one of the world’s major staple foods. However, its production is severely constrained by rice blast disease, caused by Magnaporthe oryzae, which leads to substantial yield losses. Conventional management relies on fungicides and chemical treatments; however, these methods raise concerns regarding the development of pathogen resistance and potential environmental impacts. This study evaluated carrageenan from Hypnea musciformis, collected from the coast of Saint Martin (92°19′21.28″E and 20°37′38.12″N), located in the Bay of Bengal, Bangladesh, as a natural plant growth promoter as well asbiocontrol agent. Carrageenan was characterized by high sulfate (19–35%) and galactose (12–18%) contents, with FT-IR confirming characteristic κ-carrageenan functional groups. Application of 15% carrageenan significantly increased germination of seed (27%), seedling vigor (93%), shoot and root lengths (54% and 47%), and biomass compared with untreated controls. Carrageenan markedly suppressed M. oryzae, inhibiting mycelial growth (83%), reducing conidiogenesis and conidial germination, and decreasing lesion length in detached leaves and potted plants. Treated rice seedlings exhibited improved soluble sugars, photosynthetic pigments, proline, phenolic and flavonoid contents, and enhanced antioxidant enzyme activities such as CAT (catalase) and POD (peroxidase), while lowering oxidative stress markers such as H₂O₂ and MDA (malondialdehyde). These results demonstrate that carrageenan from H. musciformis enhances rice growth and elicits defense responses against rice blast, offering a sustainable and environment friendly alternative to chemical-based fungicides for integrated M. oryzae management.