Paenibacillus polymyxa (formerly known as Bacillus polymyxa) has been extensively studied for agricultural applications as a plant-growth-promoting rhizobacterium and is also an important biocontrol agent. Our team has developed the P. polymyxa strain HY96-2 from the tomato rhizosphere as the first microbial biopesticide based on P. polymyxa for controlling plant diseases around the world, leading to the commercialization of this microbial biopesticide in China. However, further research is essential for understanding its precise biocontrol mechanisms. In this paper, we report the complete genome sequence of HY96-2 and the results of a comparative genomic analysis between different P. polymyxa strains. The complete genome size of HY96-2 was found to be 5.75 Mb and 5207 coding sequences were predicted. HY96-2 was compared with seven other P. polymyxa strains for which complete genome sequences have been published, using phylogenetic tree, pan-genome, and nucleic acid co-linearity analysis. In addition, the genes and gene clusters involved in biofilm formation, antibiotic synthesis, and systemic resistance inducer production were compared between strain HY96-2 and two other strains, namely, SC2 and E681. The results revealed that all three of the P. polymyxa strains have the ability to control plant diseases via the mechanisms of colonization (biofilm formation), antagonism (antibiotic production), and induced resistance (systemic resistance inducer production). However, the variation of the corresponding genes or gene clusters between the three strains may lead to different antimicrobial spectra and biocontrol efficacies. Two possible pathways of biofilm formation in P. polymyxa were reported for the first time after searching the KEGG database. This study provides a scientific basis for the further optimization of the field applications and quality standards of industrial microbial biopesticides based on HY96-2. It may also serve as a reference for studying the differences in antimicrobial spectra and biocontrol capability between different biocontrol agents.