Fungal pathogens often secrete numerous effectors to interfere with and/or suppress plant immunity to promote their infection. Watermelon Fusarium wilt, caused by the soil-borne fungus Fusarium oxysporum f. sp. niveum (Fon), is one of the devastating diseases that severely affect the watermelon industry. Here, we report the function of a candidate effector protein, FonCHRD, in Fon. FonCHRD harbors a chordin (CHRD) domain of unknown function and has a signal peptide with secretion activity. FonCHRD shows a relatively high expression level in Fon marcoconidia and is inducible by watermelon root tissues. Phenotypic analysis of the targeted deletion mutant revealed that FonCHRD plays roles in vegetative growth, asexual reproduction, and conidial morphology of Fon, while it is not involved in spore germination as well as cell wall, oxidative and salt stress responses. Deletion of FonCHRD impaired the ability to colonize and spread within host plants, significantly reducing its virulence on watermelon. FonCHRD is distributed across multiple compartments of plant cells but can target to the apoplast space in plants. FonCHRD inhibits the INF1- and Bcl2-associated X protein-triggered cell death and defense gene expression in transiently expressed Nicotiana benthamiana leaves. These findings suggest that FonCHRD is essential for Fon pathogenicity by modulating invasive growth and spreading abilities as well as by suppressing plant immune responses.