Plant growth promoting rhizobacteria (PGPR) provide an effective and environmentally sustainable method to protect crops against pathogens. The spore-forming Bacilli are attractive PGPR due to their ease of storage and application. Here, we characterized two rhizosphere-associated Bacillus velezensis isolates (Y6 and F7) that possess strong antagonistic activity against Ralstonia solanacearum and Fusarium oxysporum under both laboratory and greenhouse conditions. We identified three lipopeptide (LP) compounds (surfactin, iturin and fengycin) as responsible for the antimicrobial activity of these two strains. We further dissected the contribution of LPs to various biological processes important for rhizosphere colonization. Although either iturin or fengycin is sufficient for antibacterial activity, cell motility and biofilm formation, only iturin plays a primary role in defense against the fungal pathogen F. oxysporum. Additionally, we found that LP production is significantly stimulated during interaction with R. solanacearum. These results demonstrate the different roles of LPs in the biology of B. velezensis and highlight the potential of these two isolates as biocontrol agents against phytopathogens.