Abstract: The capacity of a non-pathogenic strain of Fusarium oxysporum (IMI 386351) to control fusarium wilt of a susceptible tomato (Lycopersicon esculentum Mill.) cultivar Danish Export caused by Fusarium oxysporum f. sp. lycopersici was examined along with the biology of that strain, including its phylogenetics. Based on the morphological and the molecular examinations, F. oxysporum IMI 386351 appeared to be a member of the F. oxysporum complex; phylogenetic trees inferred independently and by combining the two partial sequence genes (a mitochondrial small subunit ribosomal DNA and the nuclear translation elongation factor 1α) suggest that this strain might be a member of Fusarium oxysporum f. sp. melonis. The results of seed-coating experiments using five doses of F. oxysporum IMI 386351 revealed a complex three-organism interaction (host-endophyte-pathogen). Between two of the doses, a dose-dependent shift from one form of systemic induced resistance to a distinctly different form apparently occurred. Corresponding with this shift, the pathogen shifted from being virulent to being benign and disease incidence plummeted to zero. A plant growth promoting effect of F. oxysporum IMI 386351, which was probably associated with systemic induced resistance, consistently increased with dose. This study may be the first to demonstrate that, by means of systemic induced resistance, an endophytic fungus (as opposed to a bacterium) can suppress disease symptoms caused by plant pathogenic fungi.