•Endophytic strain B. subtilis 26DCryChS produced surfactin, Cry1Ia and proteases.•26DCryChS showed antagonistic activity against aphids and S. nodorum in vitro.•Inoculation by 26DCryChS induced JA- and SA- signaling pathways in wheat plants.•26DCryChS promoted defense of plant against S. nodorum and S. graminum.•26DCryChS can be used as the biocontrol agent for plant defense. The novel recombinant Bacillus subtilis 26DCryChS line that contains the Bacillus thuringiensis B-5351 strain gene Btcry1Ia encoding Cry1Ia toxin is described. B. subtilis 26DCryChS line kept endophytic properties and ability to synthesize lipopeptide surfactin of B. subtilis 26D strain and acquired the capability to produce Cry1Ia protein from B. thuringiensis strain B-5351. Insecticidal activity of lipopeptide-rich fraction of cultural filtrate of B. subtilis 26D strain and B. subtilis 26DCryChS line, which was identical to commercial surfactin, against greenbug Schizaphis graminum Rond was shown for the first time. Furthermore, B. subtilis 26DCryChS as much as original B. subtilis 26D strain inhibited growth of fungal wheat pathogen Stagonospora nodorum Berk. Bas1. Insertion of the gene Btcry1Ia in genome of B. subtilis 26D strain contributed to increase of aphicidal activity of B. subtilis 26DCryChS line against S. graminum as compared with both B. thuringiensis B-5351 and B. subtilis 26D strains. Bacillus strains under investigation induced transcription of some wheat genes, which participate in systemic resistance (ISR) to S. nodorum and S. graminum. Seed treatment with B. subtilis 26DCryChS line promoted greater resistance of wheat to the pathogen and aphid than B. thuringiensis B-5351 and B. subtilis 26D strains. The recombinant B. subtilis 26DCryChS line stimulated transcriptional activity of wheat genes regulating the SA- and JA-signaling pathways. Thus, B. subtilis 26DCryChS line kept an ability of the source B. subtilis 26D strain to induce salicylate-dependent genes (Tapr1 and TaPrx) and acquired the capability to stimulate transcription of jasmonate-sensitive genes (TaPI and TaChiI). Recombinant B. subtilis 26DCryChS line could be proposed as a solution for the modern biocontrol agents development.