Aims To investigate the potential of novel Bacillus velezensis P45 as an eco‐friendly alternative for bioprocessing poultry by‐products into valuable antimicrobial products. Methods and Results The complete genome of B. velezensis P45 was sequenced using the Illumina MiSeq platform, showing 4455 protein and 98 RNA coding sequences according to the annotation on the RAST server. Moreover, the genome contains eight gene clusters for the production of antimicrobial secondary metabolites and 25 putative protease‐related genes, which can be related to feather‐degrading activity. Then, in vitro tests were performed to determine the production of antimicrobial compounds using feather, feather meal and brain–heart infusion (BHI) cultures. Antimicrobial activity was observed in feather meal and BHI media, reaching 800 and 3200 AU ml−1 against Listeria monocytogenes respectively. Mass spectrometry analysis indicates the production of antimicrobial lipopeptides surfactin, fengycin and iturin. Conclusions The biotechnological potential of B. velezensis P45 was deciphered through genome analysis and in vitro studies. This strain produced antimicrobial lipopeptides growing on feather meal, a low‐cost substrate. Significance and Impact of Study The production of antimicrobial peptides by this keratinolytic strain may represent a sustainable alternative for recycling by‐products from poultry industry. Furthermore, whole B. velezensis P45 genome sequence was obtained and deposited.