Background: Molasses is a wildly used feedstock for fermentation, but it poses a severe wastewater-disposal problem worldwide. Recently, the wastewater produced by yeast during molasses fermentation is being processed into fulvic acid (FA) powder as a fertilizer for crops, but it consequently induces a problem of soil acidification after being directly applied in soil. In this study, the low-cost FA powder was bioconverted into a value-added product, γ-PGA, by a glutamate independent producer, Bacillus velezensis GJ11. Results: With FA powder, the substrates of sodium glutamate and citrate sodium used in medium were decreased around one third. Moreover, FA powder could completely substitute Mg2+, Mn2+, Ca2+ and Fe3+ in the fermentation medium. In the optimized FA powder fermentation medium, the γ-PGA was produced with its maximum concentration at 42.55 g/L and a productivity of 1.15 g/(L·h), while only 2.87 g/L was produced in the medium without FA powder. Hydrolyzed γ-PGA could trigger induced systemic resistance (ISR), e.g. H2O2 accumulation and callose deposition, against the pathogen infection in plants. Further investigations found that the ISR triggered by γ-PGA hydrolyzates was dependent on the ethylene signalling and NPR1. Conclusions: To our knowledge, this is the first report of using the industry waste, FA powder, as a sustainable substrate for the microbial synthesis of γ-PGA. This bioprocess can not only develop a new way of FA powder as a cheap feedstock for producing γ-PGA, but also help to reduce pollution from the wastewater of yeast molasses fermentation.