Water extracts from spent mushroom substrate (SMSE)of edible mushrooms, Pleurotus eryngii, Hericium erinaceus and Lentinula edodes promoted growth of pepper seedling. Mycellial growth rate of Phythopthora capsici and Fusarium oxysporum was dramatically inhibited by 100% and 70% on PDA added with SMSE of H. erinaceus. SMSEs from H. erinaceus, P. eryngii, and L. edodes effectively reduced the disease severity of Phytophthora blight of pepper caused by Phytophthora capsici to 75%, 10% and 35%, respectively. These results suggested that SMSE from the mushrooms have dual effects that suppress phythopthora blight disease and promote plant growth of pepper.