Bacillus subtilis biofilms have a fundamental role in shaping the soil ecosystem. During this process, they unavoidably interact with neighbour bacterial species. We studied the interspecies interactions between biofilms of the soil-residing bacteria B. subtilis and related Bacillus species. We found that proximity between the biofilms triggered recruitment of motile B. subtilis cells, which engulfed the competing Bacillus simplex colony. Upon interaction, B. subtilis secreted surfactin and cannibalism toxins, at concentrations that were inert to B. subtilis itself, which eliminated the B. simplex colony, as well as colonies of Bacillus toyonensis. Surfactin toxicity was correlated with the presence of short carbon-tail length isomers, and synergistic with the cannibalism toxins. Importantly, during biofilm development and interspecies interactions a subpopulation in B. subtilis biofilm lost its native plasmid, leading to increased virulence against the competing Bacillus species. Overall, these findings indicate that genetic programs and traits that have little effect on biofilm development when each species is grown in isolation have a dramatic impact when different bacterial species interact.