Objectives In this study, genome sequencing and metabolic analysis were used to identify and verify the key metabolic pathways for glucose and xylose utilization and fatty acid synthesis in the walnut endophytic bacterium (WEB) Bacillus subtilis HB1310. Results The genome sequence of WEB HB1310 was generated with a size of 4.1 Mb and GC content of 43.5%. Genome annotation indicated that the Embden-Meyerhof-Parnas, pentose phosphate, and fatty acid synthesis pathways were mainly involved in mixed sugar utilization and lipid production. In particular, diverse and abundant fatty acid synthesis genes were observed in a higher number than in other Bacillus strains. The tricarboxylic acid cycle competitively shared the carbon flux flowing before 48 h, and the acetic acid fermentation competed after 72 h. Moreover, fatty acid synthase activity was highly correlated with lipid titer with a correlation coefficient of 0.9626, and NADPH might be more utilized for the lipid synthesis within 48 h. Conclusions This study is the first attempt to explain the metabolic mechanism of mixed sugar utilization and lipid production based on genomic information, which provides a theoretical basis for the metabolic regulation of bacterial lipid production from lignocellulosic hydrolysates.