We describe the efficacy of Bacillus subtilis strain IAB/BS03 in reducing disease incidence of B. subtilis IAB/BS03 as a foliar treatment against Botrytis cinerea and Pseudomonas syringae on greenhouse-grown tomato (Solanum lycopersicon) plants. We also tested the effect of foliar treatments on lettuce (Lactuca sativa) against lettuce downy mildew caused by Bremia lactucae in multiple trials under different field conditions. All the assays indicated that B. subtilis IAB/BS03 reduced disease. To ascertain the mechanism of action, the induction of pathogenesis-related (PR) proteins, the accumulation of salicylic acid and the activation of peroxidase caused by foliar or root treatments with B. subtilis IAB/BS03 were studied in tomato. A salicylic acid-independent induction of the antifungal protein PR1 was observed after treatment with B. subtilis IAB/BS03, with the strongest induction due to root treatment compared with foliar application. A metabolic analysis of B. subtilis IAB/BS03 culture broth using Ultra Performance Liquid Chromatography coupled with ultraviolet and mass spectrometric detection determined surfactin and iturin A isomers. These compounds have been described as antifungal and antibiotic lipopeptides. The results indicated that B. subtilis IAB/BS03 could be effectively used as a biocontrol agent.