The use of the volatile-producing fungus Muscodor albus for the biological control of soil-borne diseases in greenhouse soilless growing mix was investigated. Fresh rye grain culture of M. albus incorporated into Rhizoctonia solani-infested growing mix at a rate of 15 g/L or greater provided complete control of damping-off of broccoli seedlings; restoring seedling emergence to levels similar to the non-infested control without deleterious effect to plant growth. The effect of the treatment was essentially local, suggesting that the volatile compounds associated with disease control moved little in the growing mix. Treatment with M. albus was effective at a range of temperatures, from 4 to 22 °C. The ability of M. albus to control damping-off declined rapidly after its incorporation to the growing mix, suggesting that its activity takes place in the initial hours of treatment. In treated mix, damping-off remained under control regardless of planting time after treatment, suggesting that a biological fumigation had killed R. solani. M. albus also completely controlled root rot of bell pepper caused by Phytophthora capsici. Bell pepper and cosmos showed increased growth when planted in non-infested mix treated with M. albus. Since the sterilization of the growing mix by autoclaving had a similar effect on plant growth, it is hypothesized that M. albus enhances growth by controlling deleterious microorganisms that often contaminate commercial growing mixes.