Talaromyces sp. isolate KNB-422, isolated from a rice seedling, is a biofungicidal agent effective against several seedborne pathogens of rice including Gibberella fujikuroi, which causes Bakanae disease. Because the fungal mode of action (MOA) has not yet been clarified, we used the fluorescent protein markers GFP and RFP to visualize cell-cell interactions between the biocontrol agent and the pathogen G. fujikuroi. In slide culture, the hyphal cell wall of G. fujikuroi collapsed, and fluorescence of its cytoplasm disappeared 3 days after contact with hyphae of Talaromyces sp. On inoculated rice plants, both fungi occupied the same regions of coleoptiles and roots, where the biocontrol effect of Talaromyces sp. must be exerted. Our observations suggest that the MOA of Talaromyces sp. is mycoparasitic.