For the control of pathogenic microorganisms, Bacillus spp. were isolated from diseased pepper fruits in Korea. Among them, Bacillus sp. IUB158-03 showed high inhibitory effect on mycelial growth and spore germination of C. gloeosporioides and Botrytis cinerea. The strain was identified as B. amyloliquefaciens IUB158-03 based on its physiological, biochemical characteristics and Microlog analysis. The highest level of antifungal substances by B. amyloliquefaciens IUB158-03 were obtained when the bacterium was cultured in medium containing 2% soluble starch, 3% yeast extract, 0.5% tryptone, 0.5% NH₄H₂PO₄, and 1% NaCl (pH 6.0) at 25 oC for 72 hrs. The antifungal substances were purified by butanol extraction, silica gel column chromatography, preparative thin layer chromatography, and high performance liquid chromatography. The purified antifungal substance was confirmed Rf 0.27 by TLC. This substance exhibited antifungal activity against Fusarium solani, Rhizoctonia solani, Botrytis cineria, Alternata alternaria of plant pathogenic fungi and Trichophyton mentagrophytes, Epidermophyton floccosum, Cryptococcus neoformans of human pathogenic fungi.