Endophytic Pseudomonas poae strain RE*1-1-14 was originally isolated from internal root tissue of sugar beet plants and shown to suppress growth of the fungal pathogen Rhizoctonia solani both in vitro and in the field. To identify genes involved in its biocontrol activity, RE*1-1-14 random mutagenesis and sequencing led to the identification of a nonribosomal peptide synthetase (NRPS) gene cluster predicted to encode a lipopeptide (LP) with a 10-amino acid peptide moiety. The two unlinked gene clusters consisted of three NRPS genes, designated poaA (cluster 1), and poaB and poaC (cluster 2), spanning approximately 33.7 kb. In silico analysis followed by chemical analyses revealed that the encoded LP designated poaeamide, is a structurally new member of the orfamide family. Poaeamide inhibited mycelial growth of R. solani and different oomycetes including Phytophthora capsici, Ph. infestans, and Pythium ultimum. The novel LP was shown to be essential for swarming motility of strain RE*1-1-14 and had an impact on root colonization of sugar beet seedlings The poaeamide-deficient mutant colonized the rhizosphere and upper plant cortex at higher densities and with more scattered colonization patterns than the wildtype. Collectively these results indicate that P. poae RE*1-1-14 produces a structurally new LP that is relevant for its antagonistic activity against soil-borne plant pathogens and for colonization of sugar beet roots.