To identify the taxonomy of tobacco rhizosphere-isolated strain Lyc2 and investigate the mechanisms of the antifungal activities, focusing on antimicrobials gene clusters identification and function analysis. Multilocus sequence typing and 16S rRNA analyses indicated that strain Lyc2 belongs to Burkholderia pyrrocinia. Bioassay results indicated strain Lyc2 showed significant antifungal activities against a broad range of plant and animal fungal pathogens and control efficacy on seedling damping off disease of cotton. A 55·2-kb gene cluster which was homologous to ocf gene clusters in Burkholderia contaminans MS14 was confirmed to be responsible for antifungal activities by random mutagenesis; HPLC was used to verify the production of antifungal compounds. Multiple antibiotic and secondary metabolized biosynthesis gene clusters predicated by antiSMASH revealed the broad spectrum of antimicrobials activities of the strain. Our results revealed the mechanisms of antifungal activities of strain Lyc2 and expand our knowledge about production of occidiofungin in the bacteria Burkholderia. Understanding the mechanisms of antifungal activities of strain Lyc2 has contributed to discovery of new antibiotics and expand our knowledge of production of occidiofungin in the bacteria Burkholderia.