Bacterial diarrhea causes serious losses for the sheep industry. Antibiotic resistance acquired by diarrheal bacteria is still a hurdle in the care of animal health. Thus, it is urgent to develop effective alternatives to antibiotics for controlling bacterial diarrhea. We initially isolated Bacillus spp. from Xinjiang fine wool sheep fecal and determined their properties of hemolysis and tolerance to acid and bile salts to identify potential candidates. Subsequently, we studied the position of a candidate in phylogenetic trees by 16S rRNA sequences and its susceptibility to antibiotics, ability to inhibit diarrheal bacteria, and toxicity, as well as its effects on animal health. Fourteen Bacillus spp. strains were isolated from sheep fecal. We identified the non-hemolysis B63 strain, which exhibited a high tolerance to acid and bile salts. Phylogenetic analysis indicated that the B63 strain is a new strain of Bacillus licheniformis. The B. licheniformis B63 strain was prompt to form spores, susceptible to commonly used antibiotics, and able to inhibit diarrhea-associated bacteria, including Escherichia coli, Staphylococcus aureus, and Salmonella typhi. Animal studies determined that B. licheniformis B63 at 4 × 10