Banana Fusarium wilt caused by Fusarium oxysporum f. sp. cubense tropical race 4 (Foc TR4) severely threatens global banana production. An endophytic Streptomyces strain 7‑1, isolated from the roots of Peliosanthes macrostegia, exhibited strong antifungal activity against Foc TR4 (inhibition rate: 79.75%) and broad-spectrum activity against 12 plant pathogenic fungi. The crude extract of strain 7‑1 inhibited Foc TR4 mycelial growth in a dose-dependent manner (EC50 = 69.20 μg·mL⁻¹) by disrupting cell wall/membrane integrity, inducing mycelial damage, spore apoptosis, nucleic acid leakage and membrane lipid peroxidation. Pot experiments showed strain 7‑1 achieved 63.15% biocontrol efficacy against banana Fusarium wilt, promoted banana growth, enhanced root defense enzyme activities (POD, PPO, PAL), and regulated rhizosphere microflora by enriching beneficial microbes (Bacillus) and reducing Fusarium abundance. Metabolomic analysis identified natamycin as the major active metabolite (EC50 = 8.58 μg·mL⁻¹), which exhibited similar inhibitory effects to the crude extract. Hydroponic experiments confirmed natamycin controlled banana Fusarium wilt with 34.91% efficacy at 1 × EC50. In conclusion, Streptomyces sp. 7‑1 is an environmentally friendly biocontrol strain inhibiting Foc TR4 via direct pathogen damage and indirect regulation of plant defense/rhizosphere microflora. Natamycin has potential as an agricultural fungicide, providing a new candidate and theoretical basis for sustainable control of banana Fusarium wilt.