Paenibacillus strain, UKCH21, isolated from Uttarakhand State, north western Indian Himalayas was found to produce high levels of extracellular chitinases. The 16s rRNA gene sequence showed 100% homology with P. illinoisensis (Accession No. KR856190) available in the public domain and further phylogenetic study also verified the species identity. The culture supernatants have a maximum chitinase activity of 110.8 U/ml after 3 days of culturing. The isolate showed strong antifungal activity manifested in the form of progressive mycelia degradation in dual culture plates. The pathogenicity was observed as structural deformities like uneven thickening of mycelia as a result of direct degradation of chitin. The optimum pH and temperature of UKCH21 chitinases was found to be 5 and 50°C, respectively. Partial characterization of chitinase gene also confirms the family 18 status of glycosyl hydrolase with substantial variability presented here with. Above all, percent inhibition of growth and the rapid degradation of mycelia of tested plant pathogenic fungi (Rhizoctonia solani, Fusarium solani and Sclerotium rolfsi) in bacteria seeded medium suggest its utilization as potent antifungal biocontrol agent.