Rice blast, caused by the fungus Magnaporthe oryzae, is one of the three major diseases affecting rice production and quality; it reduces rice grain yield by nearly 30%. In the early stage of this study, a strain of Bacillus velezensis with strong inhibition of M. oryzae was isolated and named ZW10. In vitro assays indicated prolonged germination time of conidia of M. oryzae treated with the antifungal substances of ZW10, 78% of the conidia could not form appressorium, and the conidial tubes expanded to form vacuolar structure and then shrank. The results of FDA-PI composite dyes showed that the antifungal substances of ZW10 inhibited the normal activity of M. oryzae hyphae that were rarely able to infect the epidermal cells of rice leaf sheath in vivo tests. In addition, rice treated with the antifungal substances of ZW10 showed a variety of defense responses, including activation of defense-related enzymes, increased expression of the salicylic acid pathway genes, and accumulation of hydrogen peroxide (H2O2), which might function directly or indirectly in resistance to pathogen attack. The field experiment with rice blast infection in different periods showed that the antifungal substances of ZW10 had the same control effect as carbendazim. The significant biological control activity of ZW10 and its capacity to stimulate host defenses suggest that this B. velezensis strain has the potential to be developed into a biopesticide for the biocontrol of rice blast.