Pythium oligandrum, a non-pathogenic soil-inhabiting oomycete, colonizes the root ecosystem of many crop species. Whereas most members in the genus Pythium are plant pathogens, P. oligandrum distinguishes itself from the pathogenic species by its ability to protect plants from biotic stresses in addition to promoting plant growth. The success of P. oligandrum at controlling soilborne pathogens is partly associated with direct antagonism mediated by mycoparasitism and antimicrobial compounds. Interestingly, P. oligandrum has evolved with specific mechanisms to attack its prey even when these belong to closely related species. Of particular relevance is the question of how P. oligandrum distinguishes between self- and non-self cell wall degradation during the mycoparasitic process of pathogenic oomycete species. The ability of P. oligandrum to enter and colonize the root system before rapidly degenerating is one of the most striking features that differentiate it from all other known biocontrol fungal agents. In spite of this atypical behaviour, P. oligandrum sensitizes the plant to defend itself through the production of at least two types of microbe-associated molecular patterns, including oligandrin and cell wall protein fractions, which appear to be closely involved in the early events preceding activation of the jasmonic acid- and ethylene-dependent signalling pathways and subsequent localized and systemic induced resistance. The aim of this review is to highlight the expanding knowledge of the mechanisms by which P. oligandrum provides beneficial effects to plants and to explore the potential use of this oomycete or its metabolites as new disease management strategies.