Soybean root rot caused by the oomycete Phytophthora sojae is a serious soilborne disease threatening soybean production in China. Bacillus velezensis FZB42 is a model strain for Gram-positive plant growth-promoting rhizobacteria and is able to produce multiple antibiotics. In this study, we demonstrated that B. velezensis FZB42 can efficiently antagonize P. sojae. The underlying mechanism for the inhibition was then investigated. The FZB42 mutants deficient in the synthesis of lipopeptides (bacillomycin D and fengycin), known to have antifungal activities, and polyketides (bacillaene, difficidin, and macrolactin), known to have antibacterial activities, were not impaired in their antagonism toward P. sojae; in contrast, mutants deficient in bacilysin biosynthesis completely lost their antagonistic activities toward P. sojae, indicating that bacilysin was responsible for the activity. Isolated pure bacilysin confirmed this inference. Bacilysin was previously shown to be antagonistic mainly toward prokaryotic bacteria rather than eukaryotes. Here, we found that bacilysin could severely damage the hyphal structures of P. sojae and lead to the loss of its intracellular contents. A device was invented allowing interactions between P. sojae and B. velezensis FZB42 on nutrient agar. In this manner, the effect of FZB42 on P. sojae was studied by transcriptomics. FZB42 significantly inhibited the expression of P. sojae genes related to growth, macromolecule biosynthesis, pathogenicity, and ribosomes. Among them, the genes for pectate lyase were the most significantly downregulated. Additionally, we showed that bacilysin effectively prevents soybean sprouts from being infected by P. sojae and could antagonize diverse Phytophthora species, such as Phytophthora palmivora, P. melonis, P. capsici, P. litchi, and, most importantly, P. infestans. IMPORTANCEPhytophthora spp. are widespread eukaryotic phytopathogens and often extremely harmful. Phytophthora can infect many types of plants important to agriculture and forestry and thus cause large economic losses. Perhaps due to inappropriate recognition of Phytophthora as a common pathogen in history, research on the biological control of Phytophthora is limited. This study shows that B. velezensis FZB42 can antagonize various Phytophthora species and prevent the infection of soybean seedlings by P. sojae. The antibiotic produced by FZB42, bacilysin, which was already known to have antibacterial effectiveness, is responsible for the inhibitory action against Phytophthora. We further showed that some Phytophthora genes and pathways may be targeted in future biocontrol studies. Therefore, our data provide a basis for the development of new tools for the prevention and control of root and stem rot in soybean and other plant diseases caused by Phytophthora.