Controlling toxigenic Fusarium graminearum (FG) is challenging. A bacterial strain (S76-3, identified as Bacillus amyloliquefaciens) that was isolated from diseased wheat spikes in the field displayed strong antifungal activity against FG. Reverse-phase high performance liquid chromatography and electrospray ionization mass spectrometry analyses revealed that S76-3 produced three classes of cyclic lipopeptides including iturin, plipastatin and surfactin. Each class consisted of several different molecules. The iturin and plipastatin fractions strongly inhibited FG; the surfactin fractions did not. The most abundant compound that had antagonistic activity from the iturin fraction was iturin A (m/z 1043.35); the most abundant active compound from the plipastatin fraction was plipastatin A (m/z 1463.90). These compounds were analyzed with collision-induced dissociation mass spectrometry. The two purified compounds displayed strong fungicidal activity, completely killing conidial spores at the minimal inhibitory concentration range of 50 µg/ml (iturin A) and 100 µg/ml (plipastatin A). Optical and fluorescence microscopy analyses revealed severe morphological changes in conidia and substantial distortions in FG hyphae treated with iturin A or plipastatin A. Iturin A caused leakage and/or inactivation of FG cellular contents and plipastatin A caused vacuolation. Time-lapse imaging of dynamic antagonistic processes illustrated that iturin A caused distortion and conglobation along hyphae and inhibited branch formation and growth, while plipastatin A caused conglobation in young hyphae and branch tips. Transmission electron microscopy analyses demonstrated that the cell walls of conidia and hyphae of iturin A and plipastatin A treated FG had large gaps and that their plasma membranes were severely damaged and separated from cell walls.