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Sheath blight, which is caused by Rhizoctonia solani, is a disease that majorly impacts rice production. A biocontrol agent used for control rice sheath blight must be sprayed on the stem at specific times during rice growth, a process that is labourintensive and renders the antagonist vulnerable to environmental factors. In this study, Trichoderma asperellum T12 was used to produce preparation by solid-state fermentation using a surface-response method. Rice hull was selected as a carrier based on its ability to sustain the T12 floating in the water and protect T12 from ultraviolet irradiation. The production of a T12-based preparation required 32% wheat bran, 7% inoculum, 2.3 g kg-1 (NH4)2SO4 and 65% water content, with fermentation at 27.5°C for 30 days and agitation every six days. The preparation demonstrated 90% biocontrol efficacy and significantly (P > 0.05) increased the seed-set rate and 1000-grain weight as compared with the pathogen treatment. The population of Trichoderma on the surface of rice leaf sheath in the treatment applied with T12 preparation increased from 232 cfu (colony forming units) g-1 fw (fresh weight) to 436 cfu g-1 fw during rice growth stage, which was significantly (P > 0.05) higher than pathogen treatment. The population of R. solani on the leaf sheath increased from 41 cfu g-1 fw to 271 cfu g-1 fw in the pathogen treatment, while remained stable (P > 0.05) at level of 10-23 cfu g-1 fw in T12 preparation applied treatment. Biocontrol of sheath blight by the addition of the preparation to the soil is effective and decreases the costs of agro-industrial waste disposal. [ABSTRACT FROM AUTHOR]