Pathogenic fungi are the main cause of yield loss and postharvest loss of crops. In recent years, some antifungal microorganisms have been exploited and applied to prevent and control pathogenic fungi. In this study, an antagonistic bacteria KRS027 isolated from the soil rhizosphere of a healthy cotton plant from an infected field was identified as Burkholderia gladioli by morphological identification, multilocus sequence analysis, and typing (MLSA-MLST) and physiobiochemical examinations. KRS027 showed broad spectrum antifungal activity against various phytopathogenic fungi by secreting soluble and volatile compounds. KRS027 also has the characteristics of plant growth promotion (PGP) including nitrogen fixation, phosphate, and potassium solubilization, production of siderophores, and various enzymes. KRS027 is not only proven safe by inoculation of tobacco leaves and hemolysis test but also could effectively protect tobacco and table grapes against gray mold disease caused by Botrytis cinerea. Furthermore, KRS027 can trigger plant immunity by inducing systemic resistance (ISR) activated by salicylic acid- (SA), jasmonic acid- (JA), and ethylene (ET)-dependent signaling pathways. The extracellular metabolites and volatile organic compounds (VOCs) of KRS027 affected the colony extension and hyphal development by downregulation of melanin biosynthesis and upregulation of vesicle transport, G protein subunit 1, mitochondrial oxidative phosphorylation, disturbance of autophagy process, and degrading the cell wall of B. cinerea. These results demonstrated that B. gladioli KRS027 would likely become a promising biocontrol and biofertilizer agent against fungal diseases, including B. cinerea, and would promote plant growth. IMPORTANCE Searching the economical, eco-friendly and efficient biological control measures is the key to protecting crops from pathogenic fungi. The species of Burkholderia genus are widespread in the natural environment, of which nonpathogenic members have been reported to have great potential for biological control agents and biofertilizers for agricultural application. Burkholderia gladioli strains, however, need more study and application in the control of pathogenic fungi, plant growth promotion, and induced systemic resistance (ISR). In this study, we found that a B. gladioli strain KRS027 has broad spectrum antifungal activity, especially in suppressing the incidence of gray mold disease caused by Botrytis cinerea, and can stimulate plant immunity response via ISR activated by salicylic acid- (SA), jasmonic acid- (JA), and ethylene (ET)-dependent signaling pathways. These results indicate that B. gladioli KRS027 may be a promising biocontrol and biofertilizer microorganism resource in agricultural applications.