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Apple replant disease (ARD) poses a serious threat to apple cultivation, primarily caused by the accumulation of Fusarium species. Bacillus species have demonstrated significant potential as microbial agents, with capabilities in promoting plant growth, suppressing soil-borne pathogens, and improving soil quality. Here in this study, strain LRB-5 was isolated from a healthy apple root system and identified as Bacillus vallismortis based on physiological and biochemical characterization and molecular sequencing analysis. It exhibited broad-spectrum antifungal activity against various Fusarium species, including F. oxysporum, F. moniliforme, F. proliferatum, and F. solani, with inhibition rates exceeding 65%. LRB-5 extracellular metabolites significantly inhibited Fusarium mycelial growth and spore germination. Greenhouse experiments demonstrated that LRB-5 reduced ARD disease severity by more than 50%. The volatile organic compounds produced by LRB-5 exhibited both antimicrobial activity and growth-promoting properties. Further assays revealed LRB-5 can secrete various cell wall-degrading enzymes and possesses plant growth-promoting capabilities. Pot experiments showed LRB-5 had excellent colonization ability in the rhizosphere of Malus hupehensis Rehd. seedlings, significantly increasing seedling biomass, soil bacterial and actinomycete populations, and the activity of root protective enzymes. Moreover, LRB-5 significantly enhanced the activity of soil enzymes while reducing the contents of phlorizin, benzoic acid, and p-hydroxybenzoic acid in the rhizosphere soil. Terminal restriction fragment length polymorphism and quantitative real-time PCR analyses revealed that LRB-5 improved bacterial carbon utilization, increased microbial diversity indices, reduced the abundance of Fusarium spp., and altered the structure of soil microbial communities. Collectively, these rusults suggest that LRB-5 effectively alleviated ARD by protecting apple roots from Fusarium infection and phenolic acid toxicity, optimizing soil microbial communities, and promoting plant growth. Future research should explore the combined application of LRB-5 with other control measures, thereby promoting its practical implementation.