Pepper southern blight, caused by Agroathelia rolfsii (Sacc.) Redhead & Mullineux (syn. Sclerotium rolfsii Sacc.), is a serious soil-borne fungal disease. The overuse of chemical pesticides to control this disease has led to pathogen resistance and environmental pollution, making biological control methods a more sustainable alternative. In this study, a strain SEC-482 with significant antagonistic effect against A. rolfsii was isolated from the rhizosphere soil of peppers. It was identified as Bacillus velezensis through morphological, physiological, biochemical and molecular analyses. The strain showed a high inhibition rate of 76.44% ± 0.37% against A. rolfsii in vitro and a control effect of 72.73% on pepper southern blight in pot experiments. Furthermore, it was observed to have a favourable impact on the growth of pepper plants. The genome sequencing and analysis revealed many genes related to antibiosis and growth promotion, as well as 14 secondary metabolite synthesis gene clusters. The strain's volatile organic compounds (VOCs), such as 2,6-diethylpyrazine, isobutyric acid and 3,4-diaminophenol, 3,5-dimethyl-1-prop-2-ynyl-pyrazole, were identified as the main antimicrobial substances. This study demonstrates that B. velezensis SEC-482 has potential for the biological control of pepper southern blight, laying a foundation for subsequent field trials to confirm its practical application value. The identification of VOCs and the exploration of the strain’s fermentation conditions provide valuable insights into its potential applications in sustainable agricultural practices.