Bacillus velezensis is well known as a plant growth-promoting rhizobacteria (PGPR) and biocontrol agent. Nevertheless, there are very few reports on the study of B. velezensis on tomato early blight, especially the biocontrol effects among different inoculation concentrations. In this study, an IAA-producing strain, Bacillus velezensis YXDHD1-7 was isolated from the tomato rhizosphere soil, which had the strongest inhibitory effect against Alternaria solani. Inoculation with bacterial suspensions of this strain promoted the growth of tomato seedlings effectively. Furthermore, inoculations at 106, 107, and 108 cfu/mL resulted in control efficacies of 100%, 83.15%, and 69.90%, respectively. Genome sequencing showed that it possesses 22 gene clusters associated with the synthesis of antimicrobial metabolites and genes that are involved in the production of IAA. Furthermore, it may be able to produce spermidine and volatile compounds that also enhance plant growth and defense responses. Our results suggest that strain YXDHD1-7 prevents early blight disease by promoting growth and enhancing the defense enzyme activities in tomato plants. This strain is a promising candidate for an excellent microbial inoculant that can be used to enhance tomato production.