Bacillus subtilis strain IB exhibiting inhibitory activity against the Fusarium head blight disease fungus Fusarium graminearum was isolated and identified. The major inhibitory compound was purified from the culture broth through anion exchange, hydrophobic interaction, and reverse phase high-performance liquid chromatography (RP-HPLC) steps. It was a 1,463-Da lipopeptide and had an amino acid composition consisting of Ala, Glx, Ile, Orn, Pro, Thr, and Tyr at a molar ratio of 1:3:1:1:1:1:2. Electrospray ionization mass spectrometry/mass spectrometry (ESI MS/MS) analyses of the natural and the ring-opened peptides showed the antagonist was fengycin, a kind of macrolactone molecule with antifungal activity produced by several Bacillus strains. Fluorescence microscopic analysis indicated this peptide permeabilized and disrupted F. graminearum hyphae.