Bacillus sp. SD-10 was investigated to develope biological pesticides for control of mushroom diseases. Bacillus sp. SD-10 showed high antifungal activity when cultured at 35∼4$0^{circ}C$ for 30∼4$0^{circ}C$. The culture filtrate of the bacterium inhibited the growth of mycelium of T. virens which is a kind of mushroom pathogene. On the test of inhibition of spore germination of T. virens, more than 5% of the culture filtrate in the media inhibited completely the germination of the spores. An antimicrobial substance, UPX-1 was purified from the culture filtrate of the Bacillus. From the $^1H$-NMR and $^{13}C$-NMR spectrum analysis, the substance was indentifed as disaccharide composed to six carbon sugars. UPX-1 has not only strong antifungal activity against T. virens but also antibacterial activity against Pseudomonas tolaassi.