Two genes, ctc and ctc2, responsible for surface layer (S-layer) protein synthesis in Bacillus thuringiensis CTC, were mutated and resulted in B. thuringiensis Tr5. To synthesize and express the N-acyl-homoserine lactonase (AHL-lactonase) in the extracellular space of B. thuringiensis, the aiiA4Q7 gene (an AHL-lactonase gene from B. thuringiensis 4Q7), which confers the ability to inhibit plant soft rot disease in B. thuringiensis 4Q7, was fused with the upstream sequence of the ctc gene, which in turn is essential for S-layer protein secretion and anchoring on the cell surface. The resulting fusion gene, slh-aiiA, was expressed in B. thuringiensis Tr5 to avoid competition for the extracellular space with the native S-layer protein. Our results indicate that B. thuringiensis Tr5 containing the fusion gene slh-aiiA displayed high extracellular AHL-degrading activity. When compared with wild-type B. thuringiensis strains, the ability of the constructed strain to inhibit soft rot disease caused by Erwinia carotovora SCG1 was markedly increased. These findings provide evidence for a significant advance in our ability to inhibit soft rot disease caused by E. carotovora.