Plant pathogens challenge our efforts to maximize crop production due to their ability to rapidly develop resistance to pesticides. Fungal biocontrol agents have become an important alternative to chemical fungicides as a result of environmental concerns regarding conventional pesticides. The complex mode of action of biocontrol agents reduces the likelihood that pathogens will develop resistance to them. We recently isolated a unique, biologically active isolate of the epiphytic fungus Pseudozyma aphidis. The P. aphidis isolated in our laboratory was found to secrete extracellular metabolites that inhibit several plant pathogens in vitro. Application of P. aphidis spores on plants in the greenhouse significantly reduced different pathogen infections. We demonstrated that P. aphidis proliferates on infected plant leaves, suggesting that it may compete for space and nutrients with plant pathogens. We also found that P. aphidis can activate an induced-resistance response in plants in a SA-, JA/ET- and NPR1-independent manner. Moreover, P. aphidis activated microbe-associated molecular pattern (MAMP)-triggered immunity (MTI) marker genes in Arabidopsis leaves, but suppressed the subsequent MAMP-triggered callose deposition. P. aphidis also suppressed the callose deposition elicited by other MAMPs (e.g. Flg22 and chitin). We suggest that P. aphidis suppresses MAMP-elicited callose deposition to enable its establishment on the plant surface, while priming the plant`s local and systemic defense response to act against pathogens.