ABSTRACT Soil cadmium (Cd) contamination poses significant risks to human health and environmental sustainability. Despite advances in bioremediation, effective bioagents with clear mechanistic insights for Cd detoxification are lacking. We first deciphered the whole‐genome sequence of a novel Cd‐tolerant Trichoderma nigricans T32781 and its in vivo heavy metal tolerance. In five independent pot and field trials, we revealed the T32781‐induced alleviation mechanisms of plant–microbe–soil interactions in wheat and barley in response to Cd toxicity using a combination of agronomic, physiological, microbiome and metabolome approaches. We discovered that T32781 inoculation in soil significantly increased grain yield and decreased grain Cd concentration in barley and wheat exposed to different soil Cd levels. T32781 predominantly colonized soils, mitigating Cd toxicity by reducing soil Cd availability and promoting beneficial soil microbial communities and metabolites. These beneficial effects were further validated in the field, where the exogenous application of key metabolites induced by T32781 inoculation in soils and plants significantly increased grain yield and reduced grain Cd concentration in barley. This work highlights the potential of T32781 to enhance plant‒microbe–soil interactions and support sustainable and safe crop production in Cd‐contaminated soils, addressing the increasing global demand for cereal production for food and feed.