<jats:sec><jats:label /><jats:p>The efficacy of a rhizobacterium <jats:italic>Streptomyces</jats:italic> <jats:italic>aurantiogriseus</jats:italic> VSMGT1014 for the production of bioactive metabolites with antifungal properties was evaluated under <jats:italic>in vitro</jats:italic> conditions. The production of bioactive metabolites by <jats:italic>S. aurantiogriseus</jats:italic> VSMGT1014 in International Streptomyces Project‐2 (ISP‐2) broth, supplemented with glucose and ammonium acetate was found to be the most suitable carbon and nitrogen sources for the maximum production of bioactive metabolites against rice pathogen, <jats:italic>Rhizoctonia solani</jats:italic>. The zone of inhibition range from 23.5 to 28.5 mm and 10.3 to 18.3 mm for glucose and ammonium acetate supplemented media, respectively. The culture filtrate of <jats:italic>S</jats:italic>. <jats:italic>aurantiogriseus</jats:italic> VSMGT1014 at pH 7.5, 37 °C at 120 rpm in 6 days of incubation showed the maximum production of bioactive metabolites with antagonistic potential. The crude metabolite was characterized by different spectral studies such as Ultraviolet spectrum, infrared‐spectrum and based on the different analytical techniques, including thin layer chromatography (TLC) and high performance liquid chromatography (HPLC) with the retention time 29.4 and the bioactive metabolite was identified as phenazine, which was confirmed by pure phenazine compound as positive control.</jats:sec>