Essential oils (EO) of several plant species have the potential to combat plant and fungal diseases. However, the effects of Achillea millefolium EO on the development of common bean (Phaseolus vulgaris L.), is still unknown. Moreover, its effect on N-2-fixing bacteria, and in general on soil properties has not been studied yet. A greenhouse trial was set up to evaluate both the influence that Achillea millefolium EO and the inoculation with three different Rhizobium strains have on the bean plant and on the chemical and microbiological properties of an agriculturally used Cambisol. Non-inoculated pots were used as control. Our findings showed a decrease in bacterial colony forming units due to EO application and an increase following the Rhizobium inoculation compared to the control. The EO application decreased soil basal respiration and activities of dehydrogenase, urease, beta-glucosidase and acid phosphatase. Such effects were stronger with higher oil concentrations. Moreover, the treatments combining Rhizobium inoculation with EO showed a positive effect on nodulation and plant height. Overall, the combined application of Achillea millefolium EO and rhizobia works as an efficient biocide that could be applied in organic agriculture without hampering the activity of nodule-forming N-fixing bacteria and the development of common bean.