A Pseudomonas strain SG3 producing biosurfactant and showing antifungal and insecticidal activities was isolated from agricultural soil severely contaminated with machine oils. The antagonistic bacterium inhibited mycelial growth of all of the tested fungal pathogens. The fermentation broth of SG3 also effectively suppressed the development of various plant diseases including rice blast, tomato gray mold, tomato late blight, wheat leaf rust, barley powdery mildew and red pepper anthracnose. An antifungal substance was isolated from the fermentation broth of SG3 by ethyl acetate partitioning, silica gel column chromatography and preparative HPLC under the guide of bioassay. The chemical structure of the antifungal substance was determined to be rhamnolipid B by mass and NMR spectral analyses. The antifungal biosurfactant showed a potent in vivo antifungal activity against gray mold and late blight on tomato plants. In addition, rhamnolipid B inhibited mycelial growth of B. cinerea causing tomato gray mold and zoospore germination and mycelial growth of P. infestans causing tomato late blight. Pseudomonas sp. SG3 producing rhamnolipid B could be used as a new biocontrol agent for the control of plant diseases occurring on tomato plants.