The effect of Trichoderma atroviride, T. harzianum, T. longibrachiatum, Clonostachys rosea and Bacillus subtilis isolates applied to wheat seeds against Rhizoctonia cerealis disease of seedlings was investigated under controlled greenhouse conditions. Most Trichoderma isolates significantly reduced the incidence of disease compared with the infected control. Bacillus subtilis was also effective against sharp eyespot, although less active than Trichoderma spp. Interactions between the antagonistic microorganisms and the cereal pathogenic fungus in dual culture experiments on agar growth medium were also studied. Almost all tested antagonists showed competitive activity against R. cerealis: inhibition of its mycelial growth and hyphal interaction. The production of extracellular β-N-acetylhexosaminidase, chitin 1,4-β-chitobiosidase, glucan 1,3-β-glucosidase and protease activity by the tested microorganisms in the presence of cell walls of R. cerealis was then determined. All isolates showed glucosaminidase and chitobiosidase activity. They also produced glucosidase activity, except B. subtilis, whereas only C. rosea, B. subtilis and one isolate of T. harzianum showed detectable levels of protease activity.