Most biocontrol agents for plant diseases have been isolated from sources such as soils and plants. As an alternative source, we examined the feces of tertiary larvae of the herbivorous rhino beetle, Allomyrina dichotoma for presence of biocontrol-active microbes. The initial screen was performed to detect antifungal activity against two common fungal plant pathogens. The strain with strongest antifungal activity was identified as Bacillus amyloliquefaciens KB3. The inhibitory activity of this strain correlated with lipopeptide productions, including iturin A and surfactin. Production of these surfactants in the KB3 isolate varied with the culture phase and growth medium used. In planta biocontrol activities of cell-free culture filtrates of KB3 were similar to those of the commercial biocontrol agent, B. subtilis QST-713. These results support the presence of microbes with the potential to inhibit fungal growth, such as plant pathogens, in diverse ecological niches.