In recent years, avocado branch blight has gradually become one of the major diseases causing mortality of avocado trees, which seriously affects the economic development of avocado planting regions. In order to investigate the cause of the disease, the pathogens were isolated from the interroot of avocado trees with the onset of the disease and identified as Lasiodiplodia theobromae. At the same time, three Bacillus velezensis strains, YK194, YK201, and YK268, with better antagonistic effects and high stability against L. theobromae, were isolated from the rhizospheric soil of healthy avocado plants. The results of branch experiments and field trials showed that the avocado leaves as well as branches treated with the strains YK194, YK201, and YK268 did not develop disease, and the incidence of avocado trees was significantly reduced. In the branch experiments, the biological control effect of the strains YK194, YK201, and YK268 reached 62.07, 52.70, and 72.45%, respectively. In the field experiments, it reached 63.85, 63.43, and 73.86%, respectively, which indicated that all these three strains possessed good biological control effects on avocado branch blight. Further investigation on the mechanism of action of antagonistic strains revealed that B. velezensis YK268 could produce lipopeptides, namely, surfactin, fengycin, and iturin, which could significantly inhibit the spore germination of L. theobromae. Consequently, these three isolates have potential as biocontrol agents against L. theobromae.