A strain of Bacillus polymyxa, designated as PKB1, has a highly inhibitory effect against Leptosphaeria maculans, the causal agent of blackleg disease of canola, as well as other economically important disease-causing fungi including Sclerotinia sclerotiorum, Rhizoctonia solani, Fusarium avenaceum and Alternaria brassicae. The life cycle of the bacterium includes a growth stage and then a dormant spore stage that may be triggered by deficiency of an essential nutrient or by increased cell density. The fungicidal activity is associated with the spores. The active component has been extracted and purified from the spores. The pure fraction has been characterized as containing two branched cyclic peptide antibiotics of eight amino acids. A B. polymyxa PKB 1 cell suspension significantly reduced pycnidiospore germination and germ tube length of L. maculans.