In order to obtain highly effective biocontrol microorganism for controlling peanut diseases, using Aspergillus niger as the indicator, a highly effective biocontrol strain ZHX-7 was screened from soil samples by agar disk dilution and dual-culture assay. The soil samples were collected from the rhizosphere of diseased and healthy peanut plants in continuous cropping field in Laixi, Shandong province. The strain ZHX-7 was identified as Bacillus velezensis based on the morphological characteristics, 16S rDNA and gyrB sequence analysis. The bacterial suspension, sterile fermentation broth and volatile gas of ZHX-7 significantly inhibited the growth of Sclerotium rolfsii, Fusarium neocosmosporiellum, Phoma arachidicola and Alternaria alternata. The antagonistic experiment results showed that the inhibition rates of ZHX-7 suspension against the growth of S. rolfsii, F. neocosmosporiellum, P. arachidicola and A. alternata were 64.40%, 70.37%, 77.43% and 65.32%, respectively. In the sterile fermentation broth of ZHX-7 diluted 10 times with PDA medium, the inhibition rates of ZHX-7 against the growth of S. rolfsii, F. neocosmosporiellum, P. arachidicola and A. alternata were 67.81%, 52.16%, 23.52% and 69.93%, respectively. The double dish test showed that the inhibition rates of ZHX-7 volatile gas against the growth of S. rolfsii, F. neocosmosporiellum, P. arachidicola and A. alternata were 86.82%, 35.40%, 81.70% and 44.19%, respectively. ZHX-7 produced secondary metabolites such as protease, cellulose and amylase. In addition, under the condition of pot culture in greenhouse, ZHX-7 fermentation broth significantly promoted the growth of peanut. Compared with the control, the fresh mass and dry mass increased by 31.24% and 26.47%, respectively. ZHX-7 fermentation broth improved the resistance of peanut to S. rolfsii, and the control effect reached 51.76%. In conclusion, a strain of B. velezensis ZHX-7 screened in this study may inhibit a variety of peanut pathogenic fungi and promote peanut growth at the same time. It is a multifunctional strain with broad antagonistic spectrum against peanut diseases, and high potential for biocontrol application.