Microbial volatile compounds (MVCs) significantly influence the growth of plants and phytopathogens. However, the practical application of MVCs at the field level is limited by the fact that the concentrations at which these compounds antagonize the pathogens are often toxic for the plants. In this study, we investigated the effect of dimethyl disulfide (DMDS), one of the MVCs produced by microorganisms, on the fitness of tomato plants and its fungicidal potential against a fungal phytopathogen, Sclerotinia minor. DMDS showed strong fungicidal and plant growth promoting activities with regard to the inhibition of mycelial growth, sclerotia formation, and germination, and reduction of disease symptoms in tomato plants infected with S. minor. DMDS exposure significantly upregulated the expression of genes related to growth and defense against the pathogen in tomato. Especially, the overexpression of PR1 and PR5 suggested the involvement of the salicylic acid pathway in the induction of systemic resistance. Several morphological and ultrastructural changes were observed in the cell membrane of S. minor and the expression of ergosterol biosynthesis gene was significantly downregulated, suggesting that DMDS damaged the membrane, thereby affecting the growth and pathogenicity of the fungus. In conclusion, the tripartite interaction studies among pathogenic fungus, DMDS, and tomato revealed that DMDS played roles in antagonizing pathogen as well as improving the growth and disease resistance of tomato. Our findings provide new insights into the potential of volatile DMDS as an effective tool against sclerotial rot disease.