Heat-stable antifungal factor (HSAF) is a broad-spectrum antifungal antibiotic produced by the biological control agent, Lysobacter enzymogenes. In our earlier works, we have applied HSAF to effectively control wheat and pear fungal disease. However, a major bottleneck in its practical application is the low HSAF production level; therefore, boosting its production is essential for its wide application. In the past, we find that c-di-GMP, a universal bacterial second messenger, is inhibitory to HSAF production. In this work, we further identified eight active diguanylate cyclases (DGCs) responsible for c-di-GMP synthesis in Lysobacter enzymogenes via both bioinformatics and genetic analyses. We generated a strain lacking seven active DGC genes and found that this DGC-modified strain, OH11LC, produced a higher HSAF amount in a c-di-GMP concentration-dependent manner. Subsequently, by employing OH11LC as the host fermentation strain, we could even produce a much higher HSAF amount (> 200-fold). After improving the HSAF production, we further developed a technique of seed coating method with HSAF, which turned out to be effective in fighting against the maize seed-borne filamentous pathogen, Pythium gramineacola. Overall, via combining strain modification and fermentation optimization, we demonstrated a good example of translating fundamental knowledge of bacterial c-di-GMP signaling into biological control application in which we relieved the inhibitory effect of c-di-GMP on HSAF biosynthesis by deleting a bunch of potentially active L. enzymogenes DGC genes to improve HSAF yield and to expand its usage in antifungal seed coating.