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BACKGROUND Biocontrol is a promising strategy in the control of rice blast disease. In the present study, we isolated and characterized a novel antagonist to the pathogen Magnaporthe oryzae from rice endophytic actinomycetes. RESULTS Out of 482 endophytic actinomycetes isolated from rice blast infected and healthy rice, Streptomyces endus OsiSh-2 exhibited remarkable in vitro antagonistic activity. Scanning electron microscopy observations of M. oryzae treated by OsiSh-2 revealed significant morphological alterations in hyphae. In 2-year field tests, the spraying of OsiSh-2 spore solution (107 spores mL−1) is capable of reducing rice blast disease severity by 59.64%. In addition, a fermentation broth of OsiSh-2 and its cell-free filtrates could inhibit the growth of M. oryzae, suggesting the presence of active enzymes and secondary metabolites. OsiSh-2 tested positive for polyketide synthase-I and nonribosomal peptide synthetase genes and can produce cellulase, protease, gelatinase, siderophore, indole-3-acetic acid and 1-amino-cyclopropane-1-carboxylate deaminase. A preliminary separation indicated that the methanol extract of OsiSh-2 could suppress the growth of pathogens. The major active component was identified as nigericin. CONCLUSION Endophytic S. endus OsiSh-2 has potential as a biocontrol agent against rice blast in agriculture. © 2016 Society of Chemical Industry [ABSTRACT FROM AUTHOR]