Paenibacillus polymyxa is a plant growth–promoting rhizobacteria (PGPR) that has significant biocontrol properties. Wheat sheath blight caused by Rhizoctonia cerealis is a significant soil–borne disease of wheat that causes significant losses in wheat production, and the biological control against the disease has received extensive attention. P. polymyxa ZYPP18 was identified using morphological and molecular characterization. An antagonistic activity experiment verified that ZYPP18 inhibits the growth of R. cerealis on artificial growth media. A detached leaf assay verified that ZYPP18 inhibits the expansion of wheat sheath blight on the detached leaf. ZYPP18 has been found to possess plant growth–promoting properties, as well as the ability to solubilize phosphate and generate indole–3–acetic acid. Results from hydroponic experiments showed that wheat seedlings treated with ZYPP18 grew faster. Additionally, pot experiments and field experiments demonstrated that ZYPP18 effectively controls the occurrence of wheat sheath blight. ZYPP18 reduced the incidence of wheat sheath blight in wheat seedlings by 37.37% and 37.90%, respectively. The control effect of ZYPP18 on wheat sheath blight was 56.30% and 65.57%, respectively. These findings provide evidence that P. polymyxa ZYPP18 is an effective biological factor that can control disease and promote plant growth.