Cyanobacterial harmful algal blooms (CyanoHABs) cause severe environmental problems, economic losses and threaten human health seriously. In the present study, a Bacillus sp. strain, designated as AF-1, with strong antagonistic activity against plant pathogenic fungus Fusarium graminearum was isolated from purple soil. Bacillus sp. AF-1 selectively killed Microcystis aeruginosa at low cell density (1.6×103cfu/mL), and showed the strongest bactericidal activity against M. aeruginosa NIES-843 (Ae=93%, t=6d). The algicidal substances originated from strain AF-1 were stable in the temperature range of 35-100°C, and pH range of 3-11. Cell-free filtrate of AF-1 culture caused excessive accumulation of intracellular reactive oxygen species (ROS), cell death and the efflux of intracellular components of M. aeruginosa NIES-843 cells. The expression of genes recA, psbA1, psbD1, rbcL and mcyB, involved in DNA repair, photosynthesis and microcystin synthesis of NIES 843, were significantly influenced by the cell-free filtrate of AF-1 culture. Bacillus sp. AF-1 has the potential to be developed as a bifunctional biocontrol agent to control CyanoHABs and F. graminearum caused plant disease.