The soil-inhabiting fungal pathogen Fusarium oxysporum has been an increasing threat to Chinese cabbage (Brassica campestris L.). A dark septate endophytic fungus, Veronaeopsis simplex Y34, isolated from Yaku Island, Japan, was evaluated in vitro for the ability to suppress Fusarium disease. Seedlings grown in the presence of the endophyte showed a 71% reduction in Fusarium wilt disease and still had good growth. The disease control was achieved through a synergetic effect involving a mechanical resistance created by a dense network of V. simplex Y34 hyphae, which colonized the host root, and siderophore production acting indirectly to induce a resistance mechanism in the plant. Changes in the relative abundance of the fungal communities in the soil as determined by fluorescently labelled T-RFs (terminal restriction fragments), appeared 3 weeks after application of the fungus. Results showed the dominance of V. simplex Y34, which became established in the rhizosphere and out-competed F. oxysporum.