Of 214 Pseudomonas strains isolated from maize rhizosphere, 46 turned out to be antagonistic, of which 43 displayed clear colony phase variation. The latter strains formed both opaque and translucent colonies, designated as phase I and phase II, respectively. It appeared that important biocontrol traits, such as motility and the production of antifungal metabolites, proteases, lipases, chitinases, and biosurfactants, are correlated with phase I morphology and are absent in bacteria with phase II morphology. From a Tn5luxAB transposon library of Pseudomonas sp. strain PCL1171 phase I cells, two mutants exhibiting stable expression of phase II had insertions in gacS. A third mutant, which showed an increased colony phase variation frequency was mutated in mutS. Inoculation of wheat seeds with PCL1171 bacteria of phase I morphology resulted in efficient suppression of take-all disease, whereas disease suppression was absent with phase II bacteria. Neither the gacS nor the mutS mutant was able to suppress take-all, but biocontrol activity was restored after genetic complementation of these mutants. Furthermore, in a number of cases, complementation by gacS of wild-type phase II sectors to phase I phenotype could be shown. A PCL1171 phase I mutant defective in antagonistic activity appeared to have a mutation in a gene encoding a lipopeptide synthetase homologue and had lost its biocontrol activity, suggesting that biocontrol by strain PCL1171 is dependent on the production of a lipopeptide. Our results show that colony phase variation plays a regulatory role in biocontrol by Pseudomonas bacteria by influencing the expression of major biocontrol traits and that the gacS and mutS genes play a role in the colony phase variation process. Therefore phase variation not only plays a role in escaping animal defense but it also appears to play a much broader and vital role in the ecology of bacteria producing exoenzymes, antibiotics, and other secondary metabolites.