Abstract Argyrotaenia sphaleropa is a lepidopteran pest in deciduous fruit orchards in Uruguay. The primary control method of these pests is the use of chemical insecticides; however, alternative strategies, friendlier to the environment and compatible with a regional programme of integrated pest management, are definitely needed. Biological control with the use of local entomopathogenic microorganisms could be a sustainable solution. In this study, a biological screening was conducted to characterize spore‐forming bacilli for their capacity to kill larvae of this species. Bacillus thuringiensis, B. pumilus, B. aryabhattai, B. amyloliquefaciens and Lysinibacillus xylanilyticus were identified based on sequence analyses of 16S and partial GyrB gene. Lysinibacilus xylanilyticus showed the highest mortality towards first‐instar larvae fed with diet treated with spore suspensions. Specific virulence factors like proteinaceous parasporal inclusions were observed not only in isolates of B. thuringiensis but also in L. xylanilyticus. Ordering of isolates based on multivariate analysis of putative secondary virulence factors like biosurfactant and biofilm production, haemolytic activity and motility, separated the virulent isolate of L. xylanilyticus. This is the first report of L. xylanilyticus causing mortality in A. sphaleropa or any other member of Lepidoptera. A search for more virulent strains of this species is envisaged. @© 2018 Blackwell Verlag GmbH