Biological control is an environmentally sound and effective means of reducing pathogen-induced damage to agriculture using natural antagonists. Paenibacillus is a cosmopolitan and ubiquitously occurring bacterial genus with antagonistic activity against phytopathogens. Many species and strains with promising potential for plant growth promotion and biocontrol of pathogens have been identified since Paenibacillus was first described 20 years ago. Nevertheless, important questions regarding the colonization of plants, and the mode of action of Paenibacillus remain unanswered. This review focuses on the occurrence of Paenibacillus in microbial metagenomes, the endophytic lifestyle of Paenibacillus, and the function of Paenibacillus-derived volatile organic compounds (VOCs) combining actual literature with our own results. This review provides new insights into the endophytic lifestyle of Paenibacillus and discusses strain-specific and system-dependent growth promotion effects on plants. VOCs, in particular pyrazine derivatives emitted by Paenibacillus, showed high activity against other organisms. This suggests that VOCs play an important role in communication and interaction. Overall, Paenibacillus strains demonstrate promising potential not only for sustainable agriculture and biological control, but also as a source for novel bioactive volatiles.