Fusarium wilt, caused by Fusarium oxysporum f. sp. Lycopersici, is a major soil-borne disease threatening tomato (Solanum lycopersicum) production worldwide, causing yield losses of up to 80 %. This study evaluated the antifungal potential of the medicinal mushroom Lentinus squarrosulus against FOL, aiming to identify bioactive metabolites for sustainable disease management. FOL was isolated from infected tomato plants in Coimbatore, identified morphologically and molecularly (GenBank accession PQ350410) and used for in vitro assays. Nine macro basidiomycetes were screened via dual culture assay; L. squarrosulus TNAU L3 showed the highest mycelial growth inhibition (55.72 %), followed by Auricularia auricular (49.26 %) and L. squarrosulus TNAU L2 (43.74 %). Ethyl acetate extracts of L. squarrosulus significantly inhibited F. oxysporum f. sp. lycopersici growth in agar well diffusion assays, with inhibition increasing from 37.44 % at 500 ppm to 67.53 % at 2000 ppm. GC-MS analysis of extracts revealed antimicrobial compounds including eicosatrienoic acid, benzofuran, isopimaric acid and cyclododecanol, linked to antifungal and immunomodulatory activities. Pathway analysis indicated these metabolites are synthesized via the pentose phosphate pathway, contributing to both direct pathogen suppression and enhancement of plant defense through metabolic modulation. The dual mechanism-pathogen inhibition and host immunity activation-suggests L. squarrosulus as a promising eco-friendly biocontrol agent. This work highlights the potential of macrobasidiomycete-derived metabolites as alternatives to synthetic fungicides and provides a preliminary framework for developing natural fungicidal formulations. Further field validation and optimization of metabolite application are needed to advance integrated management strategies for Fusarium wilt in tomato.