[Objective] To produce Bacillus thuringiensis Bt519-1 as biocontrol agent with enhanced antifungal and insecticidal activity. [Methods] A recombinant plasmid, pDM, containing a constitutive high expression promoter and the chitinase gene chiMY from B. licheniformis, was constructed and transferred into strain Bt519-1 by electroporation. Zymogram analysis was used to test the constitutive expression of chitinase of strain Bt519(pDM). Inhibitory activity of the engineered strain was measured against 10 species of fungi that are plant pathogens. The most sensitive fungus was selected to test in pot culture experiments. Roots of Capsicum annuum seedlings were irrigated with various concentrations of the Bt crude enzymes, inoculated with the fungal sporangial suspension 12 h later. The plant disease index and control efficacy were determined 7 d after inoculation. [Results] SDS-PAGE and zymogram analysis confirmed that strain Bt519(pDM) expressed chitinase (68 kD). Inhibitory of Bt519(pDM) was effective for 5 of the 10 tested fungi of which Phytophthora capsici was most sensitive. Pot culture experiments demonstrated that the control efficacy of Bt519(pDM) against P. capsici was 73.2%. The half lethal concentration (LC50) of Bt519(pDM) against the moth Heliothis armigera was 121.26 mg/L. [Conclusion] Bt519(pDM) has potential as an antifungal and insecticide.