Application of rhizospheric fungi is an effective and environmentally friendly method of improving plant growth and controlling many plant diseases. The current study was aimed to identify phytohormone-producing fungi from soil, to understand their roles in sesame plant growth, and to control Fusarium disease. Three predominant fungi (PNF1, PNF2, and PNF3) isolated from the rhizospheric soil of peanut plants were screened for their growth-promoting efficiency on sesame seedlings. Among these isolates, PNF2 significantly increased the shoot length and fresh weight of seedlings compared with controls. Analysis of the fungal culture filtrate showed a higher concentration of indole acetic acid in PNF2 than in the other isolates. PNF2 was identified as Penicillium sp. on the basis of phylogenetic analysis of ITS sequence similarity. The in vitro biocontrol activity of Penicillium sp. against Fusarium sp. was exhibited by a 49% inhibition of mycelial growth in a dual culture bioassay and by hyphal injuries as observed by scanning electron microscopy. In addition, greenhouse experiments revealed that Fusarium inhibited growth in sesame plants by damaging lipid membranes and reducing protein content. Co-cultivation with Penicillium sp. mitigated Fusarium-induced oxidative stress in sesame plants by limiting membrane lipid peroxidation, and by increasing the protein concentration, levels of antioxidants such as total polyphenols, and peroxidase and polyphenoloxidase activities. Thus, our findings suggest that Penicillium sp. is a potent plant growth-promoting fungus that has the ability to ameliorate damage caused by Fusarium infection in sesame cultivation.