Compost teas are fermented aqueous extracts of composted materials that are used for their ability to control plant pathogens. It had been previously reported that this inhibition by compost teas is at least partially attributed to the presence of live microorganisms. In this study, the inhibitory effects of bacteria from suppressive compost tea were examined against mycelial growth of Alternaria solani and Botrytis cinerea as well as disease development on tomato fruit. Isolation of antifungal extracts and identification of antifungal compounds from the most effective bacterial strains were also performed. Results showed that the bacteria had the ability to greatly inhibit the mycelial growth of B. cinerea and/or A. solani by up to 70%. The two most effective isolates, Brevibacterium linens (IC 10) and Bacillus subtilis, showed that co-application of bacterial antagonists (5 × 10⁵ or 5 × 10⁶ cells) with the pathogens on tomato fruit demonstrated inhibition of the development of B. cinerea lesions by up to 61%. A preventive application of the bacteria (5 × 10⁵ or 5 × 10⁶ cells) was more effective than co-application, allowing a significant reduction in lesions of A. solani and improving efficacy of low bacterial concentrations in reducing B. cinerea lesions. A combined B. linens/B. subtilis treatment was generally more inhibitory than either bacterium alone indicating possible synergistic effects. Antifungal compounds, including surfactins, were found in the bacterial extracts indicating that antibiosis is a main mechanism of action.