Aim To examine the inhibition effects of rhizosphere fungal strain MF-91 on the rice blast pathogen Magnaporthe grisea and sheath blight pathogen Rhizoctonia solani. Methods and Results Rhizosphere fungal strain MF-91 and its metabolites suppressed the in vitro mycelial growth of R.solani. The inhibitory effect of the metabolites was affected by incubation temperature, lighting time, initial pH and incubation time of rhizosphere fungal strain MF-91. The in vitro mycelial growth of M.grisea was insignificantly inhibited by rhizosphere fungal strain MF-91 and its metabolites. The metabolites of rhizosphere fungal strain MF-91 significantly inhibited the conidial germination and appressorium formation of M.grisea. Moreover, the metabolites reduced the disease index of rice sheath blight by 35 center dot 02% in a greenhouse and 57 center dot 81% in a field as well as reduced the disease index of rice blast by 66 center dot 07% in a field. Rhizosphere fungal strain MF-91 was identified as Chaetomium aureum based on the morphological observation, the analysis of 18S ribosomal DNA internal transcribed spacer sequence and its physiological characteristics, such as the optimal medium, temperature and initial pH for mycelial growth and sporulation production. Conclusions Rhizosphere fungus C.aureum is effective in the biocontrolling of rice blast pathogen M.grisea and sheath blight pathogen R.solani both in in vitro and in vivo conditions. Significance and Impact of the Study This study is the first to show that rhizosphere fungus C.aureum is a potential fungicide against rice blast and sheath blight pathogens.