Soil-borne infectious disease including Pythium aphanidermatum and Rhizoctonia solani causes severe damage to plants, such as cucumber. This soil-borne infectious disease was not controlled effectively by chemical pesticide. Since these diseases spread through the soil, chemical agents are usually ineffective. Instead, biological control, including antagonistic microbe can be used as a preferred control method. An efficient method was developed to select an antagonistic strain to be used as a biological control agent strain. In this new method, surface tension reduction potential of an isolate was included in the ‘decision factor’ in addition to the other factors, such as growth rate, and pathogen inhibition rate. Considering these 3 decision factors by a statistical method, an isolate from soil was selected and was identified as Bacillus sp. GB16. In the pot test, this strain showed the best performance among the isolated strains. The lowest disease incidence rate and fastest seed growth was observed when Bacillus sp. GB16 was used. Therefore this strain was considered as plant growth promoting rhizobacteria (PGPR). The action of surface tension reducing component was deduced as the enhancement of wetting, spreading, and residing of antagonistic strain in the rhizosphere. This result showed that new selection method was significantly effective in selecting the best antagonistic strain for biological control of soil-borne infectious plant pathogen. The antifungal substances against P. aphanidermatum and R. solani were partially purified from the culture filtrates of Bacillus sp. GB16. In this study, lipopeptide possessing antifungal activity was isolated from Bacillus sp. GB16 cultures by various purification procedures and was identified as a surfactin-like lipopeptide based on the Fourier transform infrared spectroscopy (FT-IR), nuclear magnetic resonance (NMR), high performance liquid chromatography mass spectroscopy (HPLC-MS), and quadrupole time-of-flight (Q-TOF) ESI-MS/MS data. The lipopeptide, named GB16-BS, completely inhibited the growth of Pythium aphanidermatum, Rhizoctonia solani, Penicillium sp., and Botrytis cineria at concentrations of 10 and 50 mg/L, respectively. A novel method to prevent the foaming and to provide oxygen was developed. During the production of surface active agent, such as lipopeptide (surfactin), large amount of foam was produced by aeration. This resulted in the carryover of cells to the outside of the fermentor, which leads to the significant loss of cells. Instead of using cell-toxic antifoaming agents, low amount of hydrogen peroxide was added. Catalase produced by cells converted hydrogen peroxide into oxygen and water. Also addition of corn oil as an oxygen vector as well as antifoaming agent was attempted. In addition, Ca-stearate, a metal soap, was added to enhance the antifoam activity of com oil. These methods could prevent the foaming significantly and maintained high dissolved oxygen in spite of lower aeration and agitation. Using these methods, high cell density, could be achieved with increased lipopeptide productivity. In conclusion to produce an effective biological control agent for soil-borne infectious disease, following strategies were attempted i) effective screening of antagonist by including surface tension as an important decision factor ii) identification of antifungal compound produced from the isolated strain iii) novel oxygenation by $H_2O_2-catalase$ with vegetable oil for antifungal lipopeptide production.