This research investigated the capture of nitrate by magnesium ions in plasma-activated water (PAW) and its antifungal effect on the cell viability of the newly emerged mushroom pathogen Cryptococcus pseudolongus. Optical emission spectra of the plasma jet exhibited several emission bands attributable to plasma-generated reactive oxygen and nitrogen species. The plasma was injected directly into deionized water (DW) with and without an immersed magnesium block. Plasma treatment of DW produced acidic PAW. However, plasma-activated magnesium water (PA-Mg-W) tended to be neutralized due to the reduction in plasma-generated hydrogen ions by electrons released from the zero-valent magnesium. Optical absorption and Raman spectra confirmed that nitrate ions were the dominant reactive species in the PAW and PA-Mg-W. Nitrate had a concentration-dependent antifungal effect on the tested fungal cells. We observed that the free nitrate content could be controlled to be lower in the PA-Mg-W than in the PAW due to the formation of nitrate salts by the magnesium ions. Although both the PAW and PA-Mg-W had antifungal effects on C. pseudolongus, their effectiveness differed, with cell viability higher in the PA-Mg-W than in the PAW. This study demonstrates that the antifungal effect of PAW could be manipulated using nitrate capture. The wide use of plasma therapy for problematic fungus control is challenging because fungi have rigid cell wall structures in different fungal groups.