Fusarium oxysporum f. sp. cepae causing basal rot disease of onion is a destructive phytopathogen resulting in 30-50% yield loss and remains as a major constraint in onion productivity. The management of disease through application of fungicide is not feasible and economically viable. Hence, the present study is focused on investigation of effective Trichoderma sp. and identifying the effective volatile organic compounds produced by it against the basal rot pathogen in onion. A total of ten Trichoderma spp. were isolated from rhizospheric soil of healthy onion plants and tested against virulent Fusarium oxysporum f. sp. cepae isolate FCIM1. The Trichoderma isolate (TIM2) showed 77.40% inhibition on mycelial growth of pathogen followed by the isolate (TIV1) with 70.36% inhibition. The molecular identification of effective Trichoderma isolate through the analysis of the rDNA of Internal Transcribed Spacers (ITS) region revealed isolate TIM2 as Trichoderma hamatum. The GC-MS analysis of Trichoderma hamatum unravelled the important volatile organic compounds like Methyl stearate, n-Hexadecanoic, Eicosane, 9-cyclohexy, Heptadecane, Dodecane, 2-cyclohexyl, to 2H-Pyran-2-one, 6-pentyl, 5-Hydroxymethylfurfural, Tetrapentacontane, 1-Dodecanol, 2-Propenoic acid, pentadecyl ester, Benzene, (2-methylbutyl) and 1,2-Dimethyltryptamine with peak area and retention time. These bioactive compounds exert a strong antifungal activity against Fusarium oxysporum f. sp. cepae. The scanning electron micrographs of Fusarium paired with effective Trichoderma (TIM2) showed the swollen hyphae with cell wall damage which is clear evident of antagonistic interaction of volatile compounds produced by Trichoderma hamatum.