Aims: The purpose of this study was to investigate the antagonistic activity of Paenibacillus polymyxa strain SCE2 against mycotoxigenic fungi and to characterize the antimicrobial compound. Methods and Results: Strain SCE2 showed a broad inhibition spectrum against different mycotoxigenic fungi. The crude supernatant obtained from strain SCE2 was filtered with Amicon Diaflo membranes, and the antimicrobial activity was detected in the fraction ranging from 0.5 to 1 kDa. The bioautography of this fraction presented two inhibition zones with both indicator strains (Micrococcus sp. and Aspergillus versicolor), suggesting that more than one substance is produced by SCE2. Based on UV-visible spectral and liquid chromatography/mass spectrometry data, phenazine-1-carboxylic acid (PCA) was characterized as the major compound present in the highest purity active fraction. Drastic alterations in the cytoplasm of A. versicolor were observed by electron microscopy. Conclusions: One of the antimicrobial substances produced by P. polymyxa SCE2 is PCA. Significance and Impact of the Study: The broad antifungal spectrum observed by the compound produced by SCE2 suggests that it has the potential to be used as an alternative or supplementary method to chemical pesticides against mycotoxigenic fungi. This is the first description of a phenazine produced by a member of the genus Paenibacillus.