Interest in biological control of plant pathogens has been stimulated in recent years by trends in agriculture towards greater sustainability and public concern about the use of hazardous pesticides. There is now unequivocal evidence that antibiotics play a key role in the suppression of various soilborne plant pathogens by antagonistic microorganisms. The significance of antibiotics in biocontrol, and more generally in microbial interactions, often has been questioned because of the indirect nature of the supporting evidence and the perceived constraints to antibiotic production in rhizosphere environments. Reporter gene systems and bio-analytical techniques have clearly demonstrated that antibiotics are produced in the spermosphere and rhizosphere of a variety of host plants. Several abiotic factors such as oxygen, temperature, specific carbon and nitrogen sources, and microelements have been identified to influence antibiotic production by bacteria biocontrol agents. Among the biotic factors that may play a determinative role in antibiotic production are the plant host, the pathogen, the indigenous microflora, and the cell density of the producing strain. This review presents recent advances in our understanding of antibiotic production by bacterial biocontrol agents and their role in microbial interactions.