The current study was designed to isolate, identify and characterize a Bacillus sp. capable of producing protease and exhibiting antifungal activity. A highly potent bacterium capable of producing protease abundantly was isolated from the soil collected from the waste pit near Microbiology Laboratory of Birendra Multiple Campus, Bharatpur and later on identified as Lysinibacillus fusiformis strain SK on the basis of morphological, physiological, biochemical and 16S rDNA gene sequencing techniques. The strain SK showed 98.36% similarity with L. fusiformis strain NBRC 15717. Using R-programming statistical analysis tool, the optimum incubation time for the highest average protease production (APP) (47.2 U/mL) was found to be 22 h at 50 °C and both incubation time and temperature showed a significant impact on the production of protease (P < 0.01). The maximum average relative protease activity (ARPA) was observed at pH 7.8 and 48 °C, whereas the least ARPA was observed in the presence of 80 g/L NaCl and 10 g/L HgCl (P < 0.01). The newly isolated bacterial strain also exhibited strong antifungal activity against aflatoxigenic Aspergillus flavus and Aspergillus parasiticus suggesting that it can be a potential candidate for protease production and activity over a wider range of temperature and pH as well as for synthesizing effective antifungal compounds.