To alleviate the stress of continuous cropping for cucumber continuous cropping (CCC) system, a beneficial fungus Trichoderma harzianum SQR-T037 (SQR-T037) was isolated and applied to soil to degrade allelochemicals exuded from cucumber plants in a Rhizobox experiment. The following phenolic acids (PAs), classified as allelochemicals, were isolated and identified from cucumber rhizospheres: 4-hydroxybenzoic acid, vanillic acid, ferulic acid, benzoic acid, 3-phenylpropionic acid, and cinnamic acid. Mixed PAs added in potato dextrose broth, each with 0.2 gram per liter, were completely degraded by SQR-T037 after 170 h of incubation. In Rhizobox experiments, inoculation of SQR-T037 in the CCC soil also degraded the PAs exuded from cucumber plant roots. This degradation was 88.8% for 4-hydroxybenzoic acid, 90% for vanillic acid, 95% for benzoic acid, and 100% for ferulic acid, 3-phenylpropionic acid, and cinnamic acid at 45 days after plantation. Simultaneously, a significant (p ≥ 0.05) decrease in the disease index of Fusarium wilt and an increase in dry weights of cucumber plants were obtained in pot experiments by application of SQR-T037. This was mostly attributed to degradation of PAs exuded from cucumber roots in CCC soil by SQR-T037 and alleviation of the allelopathic stress. Application of beneficial microorganisms, such as SQR-T037 that biodegrades allelochemicals, is a highly efficient way to resolve the problems associated with continuous cropping system.