The genus Fusarium includes a number of pathogenic species which are distributed worldwide and causes disease on both cereal and non-cereal hosts. Pathogenicity of Fusarium spp is associated with the production of different toxins mainly fumonisin B1 (FB1). In addition to causing pathogenicity in crops, fumonisin B also contaminate food which causes severe diseases in animals and humans. The potential of the genus Bacillus to antagonize phytopathogens is associated with the production of cyclic lipopeptides. The most common lipopeptides produced by Bacillus species include surfactin, iturin and fengycin, among which surfactin is effective against multiple pathogens. Depending upon the type of lipopeptides, they may serve as biocontrol agents which are eco-friendly and alternative as chemical pesticide replacement. The present study was designed to get insight and depth of knowledge of interaction of fumonisin B1 with surfactin producing Bacillus species. For this purpose the fumonisin B1 was purified from Fusarium moniliforme and Fusarium oxysporum through HPLC and FB1 presence was confirmed through LCMS. Biosurfactant activity of Bacillus spp. was characterized; their motility and biofilm formation capabilities were studied. In addition, we extracted lipopeptides from these bacteria to assess their antifungal activities and analyzed these products by mass spectrometry (MS). B. amyloliquefaciens FZB42, Bacillus sp. NH 217 and B. subtilis NH100exhibited excellent biosurfactant and surface spreading activities, whereas B. atrophaeus 176s and Paenibacillus polymyxa C1225 showed moderate activity, and B. subtilis 168 showed no activity. Strains FZB42, NH-100, NH-217, 176s and CC125 exhibited excellent biofilm formation capabilities. Lipopeptide extracts displayed good antifungal activity against various phytopathogens and their associated diseases, such as Fusarium moniliforme (rice bakanae disease), Fusarium oxysporum (root rot), Fusarium solani (root rot) and Trichoderma atroviride (ear rot and root rot). Lipopeptide extracts of these strains also showed hemolytic activity, demonstrating their strong potential to produce biosurfactants. LCMS-ESI analyses identified the presence of surfactin, iturin and fengycin in the extracts of Bacillus strains. Biologically active surfactin fractions were purified by HPLC and surfactin Avarients with chain lengths from C12 to C16 were confirmed by LCMS-ESI. In haemolytic assay, a positive correlation between surfactin A production and halo zone formation was observed. Purified surfactin A had strong antifungal activity against Fusarium oxysporum, F. moniliforme, F. solani, Trichoderma atroviride and T. reesei. Maximum fungal growth suppression (84%) was recorded at 2000 ppm against F. moniliforme. Surfactin A retained antifungal activity at different pH (5-9) and temperatures (20, 50 and 121°C). The surfactin producing FZB42, NH-100 exhibited high resistance against different concentrations (2, 5, 7, 9 and 12 ppm) of FB1 as compared to NH-217 and 176s strains. There was negative correlation between surfactin production and FB1 concentration. Expression analysis of srf A in the presence of a F. moniliforme supernatant showed that gene encoding srf A in B. subtilis NH-100 and B. amyloliquefaciens FZB42 was upregulated at 24 h time point and down regulated at 48 h. Biocontrol activity of surfactin producing Bacillus (SPB) strains NH-100, NH-217 and their purified surfactin A was also evaluated against rice bakanae disease. Hydroponic and pot experiments were conducted to determine the biocontrol activity of SPB strains and their purified surfactinA on rice super basmati. Surfactin production in the rice rhizosphere was detected by LCMS-ESI at early growth stages in hydroponics experiment inoculated with SPB strains. However, maximum yield was observed with consortium of SPB strains (T4) and purified surfactin A (T5) treatments in the pot experiment. The outcomes of present study revealed that surfactin A significantly reduced rice bakanae disease up to 80%. These findings suggest that purified surfactin A could be effective biocontrol agent against bakanae disease of rice, intended for its incorporated practice in strategies of disease management. Thus, the SPB strains assayed in this study show potential as biocontrol agents against various phytopathogens especially Fusarium species responsible for serious economic losses.