Culture filtrates of six different edible mushroom species were screened for antimicrobial activity against tomato wilt bacteria Ralstonia solanacearum B3. Hericium erinaceus, Lentinula edodes (Sanjo 701), Grifola frondosa, and Hypsizygus marmoreus showed antibacterial activity against the bacteria. Water, n-butanol, and ethyl acetate extracts of spent mushroom substrate (SMS) of H. erinaceus exhibited high antibacterial activity against different phytopathogenic bacteria: Pectobacterium carotovorum subsp. carotovorum, Agrobacterium tumefaciens, R. solanacearum, Xanthomonas oryzae pv. oryzae, X. campestris pv. campestris, X. axonopodis pv. vesicatoria, X. axonopodis pv. citiri, and X. axonopodis pv. glycine. Quantitative real-time PCR revealed that water extracts of SMS (WESMS) of H. erinaceus induced expressions of plant defense genes encoding β-1,3-glucanase (GluA) and pathogenesis-related protein-1a (PR-1a), associated with systemic acquired resistance. Furthermore, WESMS also suppressed tomato wilt disease caused by R. solanacearum by 85% in seedlings and promoted growth (height, leaf number, and fresh weight of the root and shoot) of tomato plants. These findings suggest the WESMS of H. erinaceus has the potential to suppress bacterial wilt disease of tomato through multiple effects including antibacterial activity, plant growth promotion, and defense gene induction.