Fusarium pseudograminearum (Fpg) is a significant pathogen responsible for fusarium crown rot (FCR) in wheat (Triticum aestivum L.), a disease with devastating impacts on crop yield. The utilization of biocontrol bacteria to combat fungal diseases in plants is a cost-effective, eco-friendly, and sustainable strategy. In this trial, an endophytic bacterial species, designated as SW, was isolated from the roots of wheat. The strain exhibited potent antagonistic effects against Fpg and reduced the FCR disease severity index by 76.07 ± 0.33% in a greenhouse pot trial. Here, 106 colony-forming units (CFUs)/mL of the SW strain was determined to be the minimum dose required to exhibit the antagonism against Fpg. The strain was identified as Bacillus atrophaeus using genome sequencing and comparison with type strains in the NCBI database. Whole-genome sequencing analysis revealed that SW harbors genes for siderophores, antifungal metabolites, and antibiotics, which are key contributors to its antagonistic activity. Additionally, the strain’s ability to utilize various carbon and nitrogen sources, successfully colonize wheat root tissues as an endophyte, and form biofilms are critical attributes for promoting plant growth. In summary, these findings demonstrate the ability of Bacillus atrophaeus to control FCR disease in wheat in a sustainable agricultural setting.