In this study, to retain a stable bacterial inoculant, Bacillus strains showing antifungal activity were screened. The improved production, antifungal mechanism, and stability of the antifungal metabolite by a selected strain, AF4, a potent antagonist against phytopathogenic Botrytis cinerea, were also investigated. The AF4 strain was isolated from rhizospheric soil of hot pepper and identified as Bacillus subtilis by phenotypic characters and 16S rRNA gene analysis. Strain AF4 did not produce antifungal activity in the absence of a nitrogen source and produced antifungal activity at a broad range of temperatures (25-40°C) and pH (7-10). Optimal carbon and nitrogen sources for the production of antifungal activity were glycerol and casein, respectively. Under improved conditions, the maximum antifungal activity was 140±3 AU/ml, which was higher than in the basal medium. Photomicrographs of strain AF4-treated B. cinerea showed morphological abnormalities of fungal mycelia, demonstrating the role of the antifungal metabolite. The B. subtilis AF4 culture exhibited broad antifungal activity against several phytopathogenic fungi. The antifungal activity was heat-, pH-, solvent-, and protease-stable, indicating its nonproteinous nature. These results suggest that B. subtilis AF4 is a potential candidate for the control of phytopathogenic fungi-derived plant diseases.