Abstract-The bird chili powder (Capsicum frutescens Linn.) was a source of aflatoxigenic fungus which was identified as Aspergillus flavus. The antagonist Bacillus subtilis BCC 6327 was shown to inhibit the growth and spore germination of the isolated aflatoxigenic fungus from bird chili powder. All the cell free supernatant from 12, 24 and 36 h of incubation could inhibit the growth and mycelium production with inhibition percentages of 92.1, 89.6 and 90.1%, respectively. Growth of aflatoxigenic fungi was inversely correlated with enzyme productions from B. subtilis. Productions of protease, chitinase and β-1,3-glucanase and the released sugars (total reducing sugar, glucose and N-acetylglucosamine) were enhanced by the dried fungal mycelia. B. subtilis culture filtrates, possessing protease, chitinase and β-1, 3-glucanase, were capable of hydrolyzing dried mycelia of the isolated aflatoxigenic fungi from bird chili powder.