ABSTRACT Fluorescent Pseudomonas spp. producing the antibiotic 2,4-diacetylphloroglucinol (DAPG) are ecologically important in the rhizosphere as they can control phytopathogens and contribute to disease suppressiveness. While studies of DAPG-producing Pseudomonas have predominantly focused on rhizosphere niches, the ecological role of DAPG as well as the distribution and dynamics of DAPG-producing bacteria remains less well understood for other environments such as bulk soil and grassland, where the level of DAPG producers are predicted to be low. Here, we construct a whole cell biosensor for detection of DAPG and DAPG-producing bacteria from environmental samples. We show that the sensor is highly specific towards DAPG, with a sensitivity in the low nanomolar range (<20 nm). This sensitivity is comparable to the DAPG levels identified in rhizosphere samples by chemical analysis. The biosensor enables guided isolation of DAPG-producing Pseudomonas . Using the biosensor, we probed the same grassland soil sampling site to isolate genetically related DAPG-producing Pseudomonas kilonensis strains over a period of 12 months. Next, we used the biosensor to determine the frequency of DAPG-producing Pseudomonads within three different grassland soil sites and show that DAPG producers can constitute part of the Pseudomonas population in the range of 0.35-17% at these sites. Finally, we show that the biosensor enables detection of DAPG produced by non- Pseudomonas species. Our studies show that a whole-cell biosensor for DAPG detection can facilitate isolation of bacteria that produce this important secondary metabolite and provide insight into the population dynamics of DAPG producers in natural grassland soil. IMPORTANCE The interest has grown for bacterial biocontrol agents as biosustainable alternatives to pesticides to increase crop yields. Currently, we have a broad knowledge of antimicrobial compounds, such as DAPG, produced by bacteria growing in the rhizosphere surrounding plant roots. However, compared to the rhizosphere niches, the ecological role of DAPG as well as the distribution and dynamics of DAPG-producing bacteria remains less well understood for other environments such as bulk and grassland soil. Currently, we are restricted to chemical methods with detection limits and time-consuming PCR-based and probe-hybridization approaches to detect DAPG and its respective producer. In this study, we have developed a whole-cell biosensor, which can circumvent the labor-intensive screening process, as well as increase the sensitivity at which DAPG is detected. This enables quantification of relative amounts of DAPG-producers, which in turn increases our understanding of the dynamics and ecology of these producers in natural soil environments.