Damping-off caused byPythium aphanidermatum(Pa) is one of the most destructive diseases for watermelon seedlings. Application of biological control agents againstPahas attracted the attention of many researchers for a long time. In this study, the actinomycetous isolate JKTJ-3 with strong and broad-spectrum antifungal activity was screened from 23 bacterial isolates. Based on the morphological, cultural, physiological, and biochemical characteristics as well as the feature of 16S rDNA sequence, isolate JKTJ-3 was identified asStreptomyces murinus. We investigated the biocontrol efficacy of isolate JKTJ-3 and its metabolites. The results revealed that seed and substrate treatments with JKTJ-3 cultures showed a significant inhibitory effect on watermelon damping-off disease. Seed treatment with the JKTJ-3 cultural filtrates (CF) displayed higher control efficacy compared to the fermentation cultures (FC). Treatment of the seeding substrate with the wheat grain cultures (WGC) of JKTJ-3 exhibited better control efficacy than that of the seeding substrate with the JKTJ-3 CF. Moreover, the JKTJ-3 WGC showed the preventive effect on suppression of the disease, and the efficacy increased with increase in the inoculation interval between the WGC andPa. Production of the antifungal metabolite actinomycin D by isolate JKTJ-3 and cell-wall-degrading enzymes such as β-1,3-glucanase and chitosanase were probably the mechanisms for effective control of watermelon damping-off. It was shown for the first time thatS. murinuscan produce anti-oomycete substances including chitinase and actinomycin D. This is the first report aboutS. murinusused as biocontrol agent against watermelon damping-off caused byPa.