Aflatoxin is a carcinogenic mycotoxin produced by Aspergillus flavus in corn. Non-aflatoxigenic A. flavus isolates are applied to corn fields as a biocontrol to reduce aflatoxin contamination. Direct contact or touch between aflatoxigenic and non-aflatoxigenic isolates dramatically reduces aflatoxin production. To understand the mechanism of touch inhibition, a high-throughput RNA-seq study was conducted to examine gene expression during their interaction. Non-aflatoxigenic strain KD17 and aflatoxigenic strain KD53 were grown separately and in co-culture for 30 and 72 h. Toxin production was high in the aflatoxigenic monoculture and negligible in co-cultures. When grown separately, the toxigenic strain represented 7% and 33% of the combined biomass at 30 and 72 h, respectively. However, only 3% of the sequence reads uniquely aligned to the aflatoxigenic strain during co-culture, indicating growth and/or gene expression of the aflatoxigenic strain was inhibited in response to the non-aflatoxigenic strain. Few reads aligned to the aflatoxin gene cluster during co-culture. Eighteen genes expressed during mono-culture of the non-aflatoxigenic strain were further up-regulated during co-culture, indicating a response to contact. Of those genes, seven belong to a putative secondary metabolite cluster, suggesting a potentially inhibitory compound is produced. Taken together, these results suggest that non-aflatoxigenic strains inhibit growth and aflatoxin biosynthetic gene cluster expression in aflatoxin-producing strains. In addition, other secondary metabolite genes are upregulated during biocontrol interaction. This study demonstrates a potential role of inhibitory secondary metabolites in the biocontrol mechanism and deserves further exploration to improve biocontrol formulations.