Fusarium proliferatum is a critical pathogenic fungus causing soybean root rot. A halotolerant biocontrol strain Bacillus sp. YH7-4 was isolated from the Yuncheng Salt Lake. Objective To investigate strain YH7-4 in terms of the effect on soybean growth and the control efficacy against soybean root rot. Additionally, we sought to elucidate the antifungal mechanisms of this strain and identify antimicrobial genes through whole genome sequencing. Methods The plate dual-culture method was adopted to assess the antifungal activity of strain YH7-4. Pot experiments were conducted to evaluate the safety of the strain to soybean seedlings and the control efficacy against root rot. Illumina and PacBio platforms were used for whole genome sequencing of YH7-4. Subsequent analyses included metabolic system assessment, virulence factor prediction, transporter analysis, identification of genes related to biocontrol functions, comparative genomics, and biochemical assays. Results Strain YH7-4 demonstrated the inhibition rates exceeding 75.00% against several plant pathogens, including F. proliferatum, Phytophthora sojae, Colletotrichum truncatum, and Phomopsis longicolla. Pot experiments showed that at the OD₆₀₀ value of 0.8, YH7-4 suspension significantly increased the root length and dry weight of soybean seedlings, while excessively high concentrations abolished this effect. The control efficacy of YH7-4 against F. proliferatum-induced soybean root rot reached 56.02%. Whole genome sequencing revealed a genome of 3 945 352 bp with the G+C content of 46.51% and 3 756 predicted coding genes. These genes were annotated against databases including NR, Swiss-Prot, Pfam, COG, GO, and KEGG, with 3 753, 3 537, 3 358, 3 082, 1 756, and 2 845 sequences successfully annotated, respectively. Among the proteins encoded by these genes, 130 proteins belonged to the CAZy family. Twelve secondary metabolite biosynthetic gene clusters were identified, including eight known biosynthetic gene clusters for antibiotics (surfactin, macrolactin H, bacillaene, fengycin, difficidin, bacillibactin, bacilysin, and butirosin A/butirosin B) and four gene clusters with unknown functions. Additionally, two siderophore-related genes, one gene encoding 2,3-butanediol (associated with induced systemic resistance), and 15 genes involved in biofilm formation were identified. Comparative genomics analysis indicated that YH7-4 was a strain of Bacillus velezensis and shared 2 898 orthologous core gene clusters. Biochemical characterization showed that YH7-4 had the ability to produce amylase, protease, pectinase, and cellulase. Conclusion The halotolerant strain B. velezensis YH7-4 isolated from the Yuncheng Salt Lake shows excellent control efficacy against soybean root rot. Its genome harbors genes linked to biocontrol traits and antimicrobial substance production, which makes this strain a promising candidate for managing soybean root rot and other plant fungal diseases. This study applies salt lake-derived bacteria to plant roots, demonstrating their influence on soybean growth while providing a theoretical basis for further elucidating the antifungal mechanisms of B. velezensis YH7-4.