Biological control of important fungal diseases such as Phytophthora blight of red pepper, gary mold rot of vegetables, and powdery mildew of many crops was attempted using an antagonistic bacterium, Bacillus sp. AC-1 in greenhouses and fields. The antagonistic bacterium isolated from the rhizosphere soils of healthy red pepper plant was very effective in the inhibition of mycelial growth of plant pathogenic fungi in vitro including Phytophthora capsici, Rhizoctonia solani, Pyricularia oryzae, Botrytis cinerea, Valsa mali, Fusarium oxysporum, Pythium ultimum, Alternari mali, Helminthosporium oryzae, and Colletotrichum gloeosporioides. Culture filtrate of antagonistic Bacillus sp. AC-1 applied to pot soils infested with Phytophthora capsici suppressed the disease occurrence better than metalaxyl application did until 37 days after treatment in greenhouse tests. Treatments of the bacterial suspension on red pepper plants also reduced the incidence of Phytophthora blight in greenhouse tests. In farmers' commercial production fields, however, the controlling efficacy of the antagonistic bacteria was variable depending on field locations. Gray mold rot of chinese chives and lettuce caused by Botrytis cinerea was also controlled effectively in field tests by the application of Bacillus sp. AC-1 with control values of 79.7% and 72.8%, respectively. Spraying of the bacterial suspension inhibited development of powdery mildew of many crops such as cucumber, tobacco, melon, and rose effectively in greenhouse and field tests. The control efficacy of the bacterial suspension was almost same as that of Fenarimol used as a chemical standard. Further experiments for developing a commercial product from the antagonistic bacteria and for elucidating antagonistic mechanism against plant pathogenic fungi are in progress.