Apple Valsa canker caused by the pathogenic fungus Valsa mali, are one of the most destructive diseases of woody plants worldwide. One rhizosphere microbe strain, designated as T27 and subsequently identified as Bacillus vallismortis based on morphological and phylogenetic analyses, was studied as a potential biocontrol agent. Inoculation assay showed the B. vallismortis T27 suppressed the mycelial growth of V. mali with 81.33% antifungal effect on dual culture plates and caused hyphal deformities, wrinkles. The T27 fermentation broth significantly suppress the fungi's ability to acidify the surrounding environment. The addition of T27 cell-free supernatant (CFS) caused the pH of the fungal culture medium to increase from 3.60 to 5.10. B. vallismortis T27 showed the presence of Surfactin, IturinA and Bacilysin antimicrobial biosynthetic genes by the PCR assay. In addition, the B. vallismortis T27 was able to promote plant growth by producing siderophores and solubilizing phosphorus. The application of 2% fermentation broth of T27 resulted in a significant increase of 55.99% in the height of tomato plants and a 33.03% increase in the fresh weight of tomatoes. Under laboratory and field conditions, the B. vallismortis T27 exhibited strong antifungal activities on detached twigs and intact plants. The treatment of T27 resulted in a 35.9% reduction in lesion area on detached twigs. Furthermore, when applied to intact plants, T27 demonstrated a scar healing rate of 85.7%, surpassing the 77.8% observed in the treatment with tebuconazole. Comparative transcriptome analysis showed down-regulation of the genes associated with the fungal cell wall and cell membrane's synthesis and composition during V. mali treated with the B. vallismortis T27. In addition, gene transcription level analysis under treatment with B. vallismortis T27 revealed a significant increase in the expression levels of genes associated with diterpene biosynthesis, alanine, aspartic acid and glutamate metabolism, and plant hormone signaling in the apple, consistent with qRT-PCR and RNA-seq results. In this study, B. vallismortis T27 isolated from rhizosphere soil and identified as a novel biological control agent against apple Valsa canker. It exhibited effectively control over Valsa canker through multiple mechanisms, including disrupting the fungal cell membrane structure, altering the fungal growth environment, activating the plant MAPK pathway, and inducing upregulation of plant terpene biosynthetic genes. These findings highlight the potential of B. vallismortis T27 as a promising and multifaceted approach for managing apple Valsa canker.