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Bacillus spp. is one kind of the important representative biocontrol agents against plant diseases and promoting plant growth. In this study, the whole genomic sequence of bacterial strain HMB26553 was obtained. A phylogenetic tree based on the genome and ANI (average nucleotide identity), as well as dDDH (digital DNA–DNA hybridization), was constructed, and strain HMB26553 was identified as Bacillus velezensis. Fourteen biosynthetic gene clusters responsible for secondary metabolite were predicted via anti-SMASH, and six secondary metabolites were identified by UHPLC-QTOF-MS/MS (ultra-high-performance liquid chromatography coupled to quadrupole-time-of-flight tandem mass spectrometry). When the phytopathogen Rhizoctonia solani was treated with B. velezensis HMB26553, the mycelial structure changed, ROS (reactive oxygen species) accumulated, and the mitochondrial membrane potential decreased. Characteristics of strain HMB26553 were predicted and confirmed by genomic information and experiments, such as producing IAA, siderophore, extracellular enzymes and biofilm, as well as moving and promoting cotton growth. All these results suggested the mechanisms by which B. velezensis HMB26553 inhibits pathogen growth and promotes cotton growth, which likely provided the potential biocontrol agent to control cotton Rhizoctonia damping-off. [ABSTRACT FROM AUTHOR]