Microbial agents have been widely used in the Chinese aquaculture industry due to their advantages of enhancing the immunity of aquatic animal, improving disease resistance and improving the aquaculture environment. In previous studies, we found a highly antagonistic Aeromonas hydrophila strain, Bacillus methylotrophicus WM‐1, isolated from grass carp (Ctenopharyngodon idella) culture systems. The purpose of this study was to investigate the impact of WM‐1 on cultured water and fish. Strain WM‐1 was mixed into the feed and fed to the grass carp for 30 days, set control group (CG, 0 CFU/g feed), low concentration group (LG, 103 CFU/g feed), medium concentration group (MG, 105 CFU/g feed) and high concentration group (HG, 107 CFU/g feed). Water quality and physiological indicators of grass carp were tested. Compared with CG, the concentrations of total phosphorus (TP) and soluble reactive phosphorus (SRP) were significantly increased in the MG in the early stage (before day 18, p < 0.05), whereas decreased in the long stage. After the 12th day, treatment groups showed a significant decrease in chemical oxygen demand (COD) (p < 0.05). Total nitrogen (TN), ammonia nitrogen (NH4+‐N), nitrite (NO2‐‐N) and nitrate (NO3‐‐N) had no significant difference (p > 0.05). In grass carp serum, GPT activity in MG and HG was significantly reduced, SOD activity was significantly increased, and POD in MG was significantly higher than LG and HG (p < 0.05). In the liver, the GPT activity of the LG was significantly increased (p < 0.05). Other indicators (the specific growth rate and condition factor of grass carp, serum GOT, AKP and POD activity, total liver protein content, liver SOD, POD, AKP and GPT activity, haemocyte counts) have no significant difference between CG and treatment groups (p > 0.05). The results show that WM‐1 is safe for water quality and culture objects, and has the effects of improving water quality and the immunity of grass carp. The corrent results combined with WM‐1 effectively inhibit A. hydrophila shown that WM‐1 can be applied to aquaculture production as a probiotics.