Provided are Pseudomonas protegens mutant strain Pf5-NiF, Pf5-Δ;retS, or Pf5-Δ;retS-NiF, and a screening method therefor and an application thereof. By means of Red/ET recombination and direct cloning technologies, the NiF nitrogen fixation gene island in the genome of Pseudomonas stutzeri DSM4166, taken as a whole, is cloned into the genome of Pseudomonas protegens Pf5, so as to heterologously express the same successfully to obtain a genetically engineered strain Pf5-NiF, thereby bringing a biological nitrogen fixation function to Pseudomonas protegens Pf5 which does not own a biological nitrogen fixation function. In addition, gene-directed markerless knockout of retS gene in the genome of Pseudomonas protegens Pf5 is performed to obtain a genetically engineered strain Pf5-Δ;retS. Thus, the expression levels of an antibiotic 2,4-diacetylphloroglucinol and red pigment are increased, and a mutant strain of Pseudomonas protegens Pf5 having a stronger bactericidal activity is obtained.