Sheath blight of rice is a global disease that significantly reduces rice yield. This study reports the antifungal activity of an active compound of essential oil, thymol, at different concentrations against Rhizoctonia solani (strain RS‐Gvt). In vitro assay results indicated that thymol concentrations (0.5 mg mL−1 and 0.25 mg mL−1) completely inhibited (100%) the mycelial growth of RS‐Gvt (p ≤ 0.01). Microscopic observations of thymol‐treated mycelium of RS‐Gvt at 0.0312 mg mL−1 and above concentrations, revealed a distorted mycelial morphology with deformed hyphae. Hyphae showed a bead‐like appearance, reduction in size, and constriction of the hyphae at uneven points with increased hyphal density often entangling with each other. Further, an on‐field experiment was conducted to study the field bio‐efficacy of thymol for two consecutive Kharif seasons of 2022 and 2023 using a factorial RCBD design. The disease severity was measured as the percent disease index (PDI), and the results of two seasons were pooled. Pathogen (RS‐Gvt) and thymol were inoculated in different combinations/methods as main treatments (M1‐M3), and concentrations of thymol (0.0625–1.0 mg ML−1) as sub‐treatments. The results indicated that all two factors significantly (P = 0.05) influenced the PDI and grain yield. The pooled data of two seasons indicated a significant difference between the main treatments (M1: RS‐Gvt + thymol together; M2: thymol sprayed first followed by RS‐Gvt; M3: RS‐Gvt first followed by thymol spray) on PDI (53.39–59.67) and grain yield (4.16–4.75 t ha−1). M1 exhibited a lower PDI (53.39) and a higher grain yield (4.75 t ha−1) compared to M2 and M3, indicating a protective mode of action of thymol against sheath blight disease of rice. The sub‐treatments have shown significant variation in PDI and grain yield. The PDI and grain yield ranged from 33.70 (at 1 mg mL−1) to 66.21 (at 0.0625 mg mL−1) and 4.18 (at 1 mg mL−1) to 5.26 (at 0.0625 mg mL−1) t ha−1, respectively, among the thymol concentrations. This indicates that increasing concentrations of thymol have negatively influenced the PDI and positively impacted the yield. Therefore, the spray of 1 mg mL−1 of thymol at the potential disease‐infection stage is most effective in controlling the sheath blight disease of rice. This study provides an alternative green bioactive compound for controlling the sheath blight disease, and thymol can be included in developing eco‐friendly integrated disease management practices. © 2024 Society of Chemical Industry.