The wide spread of plant pathogens affects the whole world, threatening national food security. Various fungi includingRhizoctonia solaniinduce the fungal disease damping-off that negatively affects plant seedlings’ growth. Recently, endophytic fungi are used as safe alternatives to chemical pesticides that harm plant and human health. Here, an endophyticAspergillus terreuswas isolated fromPhaseolus vulgarisseeds to control damping-off diseases by improving the defense system inPhaseolus vulgarisandVicia fabaseedlings. Endophytic fungus was morphologically and genetically identifiedAspergillus terreus, and it is deposited in GeneBank under accession OQ338187.A. terreusdemonstrated antifungal efficacy againstR. solaniwith an inhibition zone at 22.0 mm. Moreover, the minimum inhibitory concentrations (MIC) of ethyl acetate extract (EAE) ofA. terreuswere between 0.3125 and 0.625 mg/mL to inhibitR. solanigrowth. Precisely 58.34% of theVicia fabaplants survived whenA. terreuswas added compared with the untreated infected (16.67%). Similarly,Phaseolus vulgarisachieved 41.67% compared to the infected (8.33%). Both groups of treated infected plants showed reduced oxidative damage (reduced Malondialdehyde and hydrogen peroxide levels) as compared to untreated infected plants. Reduced oxidative damage was correlated with the increase in photosynthetic pigments and the antioxidant defense system including polyphenol oxidase, peroxidase, catalase, and superoxide dismutase enzyme activities. Overall, the endophyticA. terreuscan be considered an effective tool to control the suppression ofRhizoctonia solaniin legumes, especiallyPhaseolus vulgarisandVicia faba, as an alternative to synthetic chemical pesticides that harm the environment and human health.