ABSTRACT Fusarium wilt is a widespread disease causing serious production losses in watermelon (Citrullus lanatus L.). Accordingly, control agents to manage this disease should be developed to ensure the sustainability of watermelon cultivation. In this study, inactivated Fusarium oxysporum f. sp. niveum (FON) mycelia were used as a decoy inoculation agent, and the effects of this treatment on Fusarium wilt and its possible underlying mechanisms were investigated. Inoculation with inactivated FON mycelia significantly decreased rhizosphere FON number and Fusarium wilt disease severity, and this might be closely related to the observed improved abundances and community structures of native beneficial rhizosphere microorganisms. In addition, inactivated FON mycelia inoculation significantly enhanced soil enzyme activity levels and plant systemic resistance, which promoted resistance to Fusarium wilt and thus watermelon growth. These results demonstrated that inactivated FON mycelia could be used as a novel biocontrol agent to alleviate Fusarium wilt and increase yields in watermelon.