To obtain an effective bacterial biocontrol strain against the fungal pathogen Ganoderma pseudoferreum, causing rubber tree red root rot disease, healthy rubber tree tissue from Baisha County, Hainan Province, was selected as the isolation source, and bacterial strains with strong antifungal effects against G. pseudoferreum were screened. The strain was identified by molecular biology, in vitro root segment tests, pot growth promotion tests, and genome detection. The strain was further evaluated by biological function tests, genome annotation analysis, and plant defense-related enzyme activity detection. The results show that strain LSR7 had good antagonistic effects against G. pseudoferreum, and the inhibition rate reached 88.49%. The strain LSR7 was identified as Bacillus velezensis by genome sequencing. In a greenhouse environment, LSR7 prevents and treats red root rot disease in rubber trees and promotes the growth of rubber tree seedlings. LSR7 secreted cell wall hydrolases (protease, glucanase, and cellulase), amylases, and siderophores. LSR7 also formed biofilms, facilitating plant colonization. Genome prediction showed that LSR7 secreted multiple antifungal lipopeptides. LSR7 enhanced rubber tree resistance to G. pseudoferreum by increasing the activity of defense enzymes. Bacillus velezensis LSR7 has biocontrol potential and is a candidate strain for controlling red root rot disease in rubber trees.