Aflatoxins are carcinogens produced by the fungi Aspergillus flavus and A. parasiticus that contaminate pistachio crops. International markets reject pistachio when aflatoxins exceed permitted maximum levels. Releasing the atoxigenic strain AF36 of A. flavus is the leading aflatoxin pre-harvest control method. The product AF36 Prevail, sorghum grains coated with AF36 propagules, has been used in California since 2017. However, a high percentage of grains of the Prevail fail to sporulate in orchards. Here, the effect of soil moisture on the percentage of AF36 product grains sporulating (SG) and the quantity of spores per grain using a sporulation index (SI) was determined. Under controlled conditions, SG was higher than 85% when soil moisture was 13% or more, and SI increased with increasing soil moisture from 8.4 to 21%. The highest AF36 sporulation occurred near the micro-sprinklers when the grains were not impacted by the irrigation water drops. Arthropod predation was responsible for lost product grains, which was more pronounced in non-tilled soil than in tilled soil. Dispersal of the AF36 spores decreased markedly with the height and distance from the inoculum source, following a pattern of diffusion equations. However, AF36 spores easily reached canopies of pistachios located 10 m from the inoculum source. Our results indicate that AF36 Prevail should be applied close to the irrigation line in the moist soil area but avoiding the areas where excess irrigation causes water accumulation. The biocontrol of aflatoxins in California's pistachio production areas was optimized by improving the field realization of the biological control agent.