The soil-borne fungi Fusarium oxysporum f. sp. cubense tropical race 4 (Foc TR4) causes banana Fusarium wilt, which seriously threats global banana production. Biocontrol has been considered viable alternative method to manage banana Fusarium wilt. In previous study, we found that novel S. luomodiensis SCA4-21 exhibited antifungal activity. Here, we revealed that the extracts of strain SCA4-21 significantly inhibited the growth of Foc TR4 hyphae and spore germination, severely disrupting the ultrastructure of Foc TR4 hyphal cells and spore morphology. These extracts also exhibited broad-spectrum antifungal activity against eight other phytopathogenic fungi. Furthermore, we demonstrated that strain SCA4-21 produce 32 volatile organic compounds, including five antifungal compounds. In a pot experiment, we discovered that the inoculation of strain SCA4-21 significantly inhibited the infection of Foc TR4 in banana seedling corms, achieving a biocontrol efficiency of 59.3%, and promoted the growth of banana seedlings. Additionally, this inoculation significantly enhanced the abundances of beneficial bacterial genera Streptomyces, Bacillus, Sphingomonas, and Massilia, as well as fungal genera Mortierella, Purpureocillium, Gibellulopsis, and Xenomyrothecium, while significantly reduced the abundances of pathogenic bacteria genus Pantoea and fungal genus Fusarium, in the banana rhizosphere soil. Moreover, the inoculation of strain SCA4-21 significantly increased the enrichment of pathways such as carbohydrate metabolism, amino acid metabolism, and metabolism of terpenoids and polyketides. Therefore, we postulated that strain SCA4-21 may synergistically combat banana Fusarium wilt by producing antifungal compounds and enriching beneficial bacteria and fungi. Our findings present a promising biocontrol agent for the management of banana Fusarium wilt.