In the 1990s several Burkholderia strains were registered as biocontrol agents by the United States Environmental Protection Agency (EPA). At the same time, however, members of the genus emerged as opportunistic pathogens causing severe infections in cystic fibrosis and immunocompromised patients. Following risk assessment, these products were consequently withdrawn from the market and the EPA placed a moratorium on the registration of Burkholderia sp. as biocontrol agents. Recent advances in the phylogenetics of the genus resulted in its division into the Burkholderia sensu stricto, which includes human and plant pathogens, and several other genera comprised by supposedly harmless and beneficial environmental species. However, the demarcation of beneficial and pathogenic Burkholderia sensu lato strains is primarily based on phylogenetics, with limited experimental validation. To address this knowledge gap, we analyzed 76 Burkholderia sensu lato strains for virulence using a Galleria mellonella infection model, biocontrol activities through in vitro antimicrobial assays, and various phenotypic traits linked to virulence or biocontrol. Genomic and phenotypic analyses associated certain traits with specific clades, such as proteolytic activity in pathogenic strains and oxalate utilization in environmental strains. While most pathogenic strains were within the Burkholderia sensu stricto, some Paraburkholderia strains also exhibited virulence. We show that transferring the gene cluster for the biosynthesis of the siderophore ornibactin from a pathogenic Burkholderia cenocepacia strain to the enviromental strain Paraburkholderia sacchari conferred virulence without affecting biocontrol or environmental persistence. This highlights the fine line between pathogenic and harmless strains within the Burkholderia sensu lato lineage. Nevertheless, we identified phenotypic traits as well as genetic markers that allow to evaluate the potential pathogenic and biocontrol potential of a Burkholderia sensu lato strain.