Trichoderma species have received significant interest as beneficial fungi for boosting plant growth and immunity against phytopathogens. By establishing a mutualistic relationship with plants, Trichoderma causes a series of intricate signaling events that eventually promote plant growth and improve disease resistance. The mechanisms contain the indirect or direct involvement of Trichoderma in enhancing plant growth by modulating phytohormones signaling pathways, improving uptake and accumulation of nutrients, and increasing soil bioavailability of nutrients. They contribute to plant resistance by stimulating systemic acquired resistance through salicylic acid, jasmonic acid, and ethylene signaling. A cascade of signal transduction processes initiated by the interaction of Trichoderma and plants regulate the expression of defense‐related genes, resulting in the synthesis of defense hormones and pathogenesis‐related proteins (PRPs), which collectively improve plant resistance. Additionally, advancements in omics technologies has led to the identification of key pathways, their regulating genes, and molecular interactions in the plant defense and growth promotion responses induced by Trichoderma. Deciphering the molecular mechanism behind Trichoderma's induction of plant defense and immunity is essential for harnessing the full plant beneficial potential of Trichoderma. This review article sheds light on the molecular mechanisms that underlie the positive effects of Trichoderma‐induced plant immunity and growth and opens new opportunities for developing environmentally friendly and innovative approaches to improve plant immunity and growth.