Paenibacillus polymyxa is a plant growth-promoting rhizobacterium that has immense potential to be used as an environmentally friendly replacement of chemical fertilizers and pesticides. In the present study, Paenibacillus polymyxa SK1 was isolated from bulbs of Lilium lancifolium. The isolated endophytic strain showed antifungal activities against important plant pathogens like Botryosphaeria dothidea, Fusarium oxysporum, Botrytis cinerea, and Fusarium fujikuroi. The highest percentage of growth inhibition, i.e., 66.67 ± 2.23%, was observed for SK1 against Botryosphaeria dothidea followed by 61.19 ± 3.12%, 60.71 ± 3.53%, and 55.54 ± 2.89% against Botrytis cinerea, Fusarium fujikuroi, and Fusarium oxysporum, respectively. The metabolite profiling of ethyl acetate fraction was assessed through the UHPLC-LTQ-IT-MS/MS analysis, and putative identification was done with the aid of the GNPS molecular networking workflow. A total of 29 compounds were putatively identified which included dipeptides, tripeptides, cyclopeptides (cyclo-(Leu-Leu), cyclo(Pro-Phe)), 2-heptyl-3-hydroxy 4-quinolone, 6-oxocativic acid, anhydrobrazilic acid, 1-(5-methoxy-1H-indol-3-yl)-2-piperidin-1-ylethane-1,2-dione, octadecenoic acid, pyochelin, 15-hydroxy-5Z,8Z,11Z, 13E-eicosatetraenoic acid, (Z)-7-[(2R,3S)-3-[(2Z,5E)-Undeca-2,5-dienyl]oxiran-2-yl]hept-5-enoic acid, arginylasparagine, cholic acid, sphinganine, elaidic acid, gossypin, L-carnosine, tetrodotoxin, and ursodiol. The high antifungal activity of SK1 might be attributed to the presence of these bioactive compounds. The isolated strain SK1 showed plant growth-promoting traits such as the production of organic acids, ACC deaminase, indole-3-acetic acid (IAA), siderophores, nitrogen fixation, and phosphate solubilization. IAA production was strongly correlated with the application of exogenous tryptophan concentrations in the medium. Furthermore, inoculation of SK1 enhanced plant growth of two Lilium varieties, Tresor and White Heaven, under greenhouse condition. In the light of these findings, the P. polymyxa SK1 may be utilized as a source of plant growth promotion and disease control in sustainable agriculture.