A bacterial strain PB1 with antagonistic activity against pathogenic fungi was isolated from marine soil and was identified as Paenibacillus elgii based on phenotypic and genotypic characterization. The isolate showed good antifungal activity against "Aspergillus niger (MTCC 282), Trichophyton rubrum (MTCC 791), Microsporum gypseum (MTCC 2819), Candida albicans (MTCC 227), and Saccharomyces cerevisiae (MTCC 170)". Chitinase and beta 1, 4-endoglucanase are known for their capability to degrade fungal cell wall, thus we analyzed its productivity in PB1 strain using Plackett-Burman and Central Composite Design. The factors that affect the productivity of chitinase and beta 1, 4-endoglucanase were identified and optimized. A 7.77-fold increase (3.157 to 24.53 +/- 1.33 U/mL) in chitinase and 7.422-fold increase (6.476 to 48.066 +/- 0.676 U/mL) in beta 1, 4-endoglucanase versus basal medium was achieved. Chitinase and beta 1, 4-endoglucanase produced by Paenibacillus elgii strain PB1 represents the new source for biotechnological, medical, and agricultural applications.