Here we report the draft genome sequence of an endophytic Paenibacillus tyrfis strain isolated from the Universiti Kebangsaan Malaysia reserve forest, Malaysia. The genome size was approximately 8.04 Mb, and the assembly consisted of 107 scaffolds with 168 contigs, and had a G + C content of 53%. Phylogenetic analysis of strain SUK123 using the 16S rRNA gene revealed that it belonged to the family Paenibacillaceae with the highest similarity to Paenibacillus elgii SDT (99%). Whole genome comparison of SUK123 with related species using average nucleotide identity (ANI) analysis revealed a similarity of 98% to Paenibacillus tyrfis Mst1T, 94% to Paenibacillus elgii B69T, 91% to Paenibacillus ehimensis A2T, 68% to Paenibacillus polymyxa SC2T and 69% to Paenibacillus alvei DMS29T. The draft genome was deposited at the European Nucleotide Archive (PRJEB21373).