Several beneficial microbial strains inhibit the growth of different phytopathogens and commercialized worldwide as biocontrol agents (BCAs) for plant disease management. These BCAs employ different strategies for growth inhibition of pathogens, which includes production of antibiotics, siderophores, lytic enzymes, bacteriocins, hydrogen cyanide, volatile organic compounds, biosurfactants and induction of systemic resistance. The efficacy of antagonistic strains could be further improved through genetic engineering for better disease suppression in sustainable farming practices. Some antagonistic microbial strains also possess plant-growth-promoting activities and their inoculation improved plant growth in addition to disease suppression. This review discusses the characterization of antagonistic microbes and their antimicrobial metabolites, and the application of these BCAs for disease control. The present review also provides a comprehensive summary of the genetic organization and regulation of the biosynthesis of different antimicrobial metabolites in antagonistic strains. Use of molecular engineering to improve production of metabolites in BCAs and their efficacy in disease control is also discussed. The application of these biopesticides will reduce use of conventional pesticides in disease control and help in achieving sustainable and eco-friendly agricultural systems.