Wood is a habitat for a variety of organisms, including saprophytic fungi and bacteria, playing an important role in wood decomposition. Wood inhabiting fungi release a diversity of volatiles used as signaling compounds to attract or repel other organisms. Here, we show that volatiles of Schizophyllum commune are active against wood-decay fungi and bacteria found in its mycosphere. We identified sesquiterpenes as the biologically active compounds, that inhibit fungal growth and modify bacterial motility. The low number of cultivable wood inhabiting bacteria prompted us to analyze the microbial community in the mycosphere of S. commune using a culture-independent approach. Most bacteria belong to Actinobacteria and Proteobacteria, including Pseudomonadaceae, Sphingomonadaceae, Erwiniaceae, Yersiniaceae and Mariprofundacea as the dominating families. In the fungal community, the phyla of ascomycetes and basidiomycetes were well represented. We propose that fungal volatiles might have an important function in the wood mycosphere and could meditate interactions between microorganisms across domains and within the fungal kingdom.