A bacterium having strong chitinolytic activity on $0.2\%$ colloidal chitin-containing agar medium was isolated from coastal soil in Korea. Based on the nucleotide sequence of conserved segment of a 165 rRNA gene, the bacterium was identified as Paenibacillus illinoisensis KJA-424. The population of P. illinoisensis KJA-424 and chitinase activity significantly increased for the first 2 days of incubation. On SDS-PACE analysis with $0.01\%$ glycol chitin, three protein bands (63, 54, and 38 kDa) with chitinolytic activity were detected tooted. The effect of P illinoisensis KJA-424 on the egg hatch of root-knot nematode (Meloidogyne incognita) was investigated. After 7 days of incubation with the chitinase-producing P. illinoisensis KJA-424, none of the eggs hatched, whereas a $39.8\%$ egg hatching rate was observed in the water control. Inverted and scanning electron microscopic observations demonstrated that P. illinoisensis KJA-424 deformed and destroyed the eggshell of M. incognita. In conclusion, chitinase-produced by p. illinoisensis KJA-424 caused the lysis of M. incognita eggshell and resulted in the inhibition of egg hatching in vitro.