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This study aimed to develop the eco-friendly production of bioactive <i>1</i>-hydroxyphenazine (HP) through fermentation using an industrial processing by-product of cassava as the main carbon/nitrogen source. Cassava starch processing by-product (CSPB) was screened as a suitable substrate for fermentation to produce HP with a high yield. Mixing CSPB with a minor amount of tryptic soy broth (TSB) at a ratio of 8/2 and with 0.05% K₂HPO₄ and 0.05% FeSO₄ was effective in HP production by <i>Pseudomonas aeruginosa</i> TUN03. HP was also further scaled up through production on a bioreactor system, which achieved a higher level yield (36.5 µg/mL) in a shorter fermentation time (10 h) compared to its production in the flask (20.23 µg/mL after 3 days). In anti-fungal activity tests against various <i>Fusarium</i> phytopathogens, HP exhibited the most significant effect on <i>Fusarium oxysporum</i> F10. It could inhibit the mycelial growth of this fungus, with an inhibition rate of 68.7% and anti-spore germination activity of up to 98.4%. The results of the docking study indicate that HP effectively interacted with the protein 1TRY targeting anti-<i>F. oxysporum,</i> with all obtained docking parameters in the accepted range. This study supports the novel use of CSPB as the carbon/nitrogen source for <i>P. aeruginosa</i> fermentation to produce HP, a <i>F. oxysporum</i> anti-fungal agent reported here for the first time.