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Red pepper, one of the major economic crops in Korea, is being affected by anthracnose disease caused by Colletotrichum acutatum. To control this disease, an antagonistic bacterial strain, Bacillus subtilis YGB36 identified by 16S rDNA sequencing, physiological and biochemical analyses is used as a biological control agent. In vitro screening revealed that the strain YGB36 possess strong antifungal activity against the pathogen Cylindrocarpon destructans. The strain exhibited cellulase, protease, amylase, siderophore production and phosphate solubility. In vitro conidial germination of C. acutatum was most drastically inhibited by YGB36 cell suspensions (106 cfu/ml) or culture filtrate. Development of anthracnose symptoms was reduced on detached immature green pepper fruits by treatment with cell suspensions, and its control value was recorded as 65.7%. The YGB36 bacterial suspension treatment enhanced the germination rate of red pepper seeds and promoted root development and growth under greenhouse conditions. The in vitro screening of fungicide and insecticide sensitivity test against YGB36 revealed that the bacterial growth was not affected by any of the insecticides, and 11 fungicides out of 21 used. Collectively, our results clearly suggest that the strain YGB36 is considered as one of the potential biocontrol agents against anthracnose disease in red pepper.