Abstract: Strain 518 was identified as Paecilomyces lilacinus through morphological and molecular identification. Products of its liquid fermentation could inhibit the tomato grey mould，Botrytis cinerea，and promote the development of tomato plant， Solanum lycopersicum. After solid state fermentation，four compounds were separated and identified，i.e. ergosterol，D\|mannitol，3β，5α，6β-trihydroxyergosta-7，22-diene （cereviosterol） and beauvericin.

Key words: fungi 518, Paecilomyces lilacinu, secondary metabolites