Fusarium wilt of banana caused by Fusarium oxysporum f. sp. cubense tropical race 4 (Foc TR4) is one of the most disastrous fungal diseases. Biological control is a promising strategy for controlling Fusarium wilt of banana. To explore endophytic actinomycetes as biocontrol resources against Foc TR4, antagonistic strains were isolated from different tissues of medicinal plants. Here, a total of 144 actinomycetes were isolated and belonged to Nonomuraea, Kitasatospora, and Streptomyces. Forty-three isolates exhibited antifungal activities against Foc TR4. The strain labeled with 5-4 isolated from roots of Piper austrosinense had a broad-spectrum antifungal activity by the production of chitinase and β-1,3-glucanase and was identified as Streptomyces hygroscopicus subsp. hygroscopicus 5-4. Furthermore, disease index of banana wilt was significantly reduced by application of strain 5-4 in comparison with application of Foc TR4 alone. Exogenous application of strain 5-4 increased the expression levels of defense genes such as (PAL), peroxidase (POD), pathogenesis-related protein 1 (PR-1), hydrolytic enzymes (β-1,3-glucanase), lysin motif receptor kinase 1 (LYK-1), and mitogen-activated protein kinase 1 (MPK-1). The antifungal mechanism assay demonstrated that extracts of strain 5-4 inhibited spore gemination and hyphal growth of Foc TR4, and caused abnormally swollen, deformity, and rupture of Foc TR4 hypha. Thus, S. hygroscopicus subsp. hygroscopicus 5-4 could be used as a potential biological agent for controlling Fusarium wilt of banana.