Continuous cropping is a universal challenge in agriculture because it has adverse physiological effects on plants, resulting in stunting, inferior quality, and even massive loss in harvest due to diseases. In this study, Phanerochaete chrysosporium was inoculated into the field in which cut chrysanthemum had already been continuously cropped for five years to control wilt disease. After 120 days of cultivation, the addition of P. chrysosporium significantly improved the physiological status of plants and changed the bacterial and fungal community structure in the soil. The bacterial quantity in the treatment increased by 1.76 times, but the fungal quantity, especially the quantity of Fusarium oxysporum, decreased significantly in comparison with the control. The investigation into the mechanisms of control of Fusarium wilt of cut chrysanthemum by P. chrysosporium showed that P. chrysosporium in soil can inhibit the growth of F. oxysporum and decrease p-hydroxybenzoic acid (HA), which stimulates the propagation of F. oxysporum. Based on current evidence, the inhibition by P. chrysosporium and change in HA appear to be the main causes of the alleviation of wilt disease in the treatment. Other factors, such as nutrients, might also have an influence on the wilt disease of cut chrysanthemum.