Outbreaks of cobweb disease are becoming increasingly prevalent globally, severely affecting the quality and yield of Agaricus bisporus. However, cobweb disease-resistant strains are rare, and little is known regarding the biocontrol management of the disease. Here, we isolated a pathogen from a severe outbreak of cobweb disease on A. bisporus in China and identified it as Cladobotryum mycophilum based on morphological characteristics, rDNA sequences, and pathogenicity tests. We then tested 30 A. bisporus strains for cobweb disease resistance by inoculating with C. mycophilum and evaluated the activity of different botanicals. We found that two wild strains of A. bisporus originating from the Tibetan Plateau in China were resistant to cobweb disease, and four commercial strains were susceptible. Yield comparisons of the inoculated and uninoculated strains of A. bisporus with C. mycophilum revealed yield losses of 6–38%. We found that seven botanicals could inhibit C. mycophilum growth in vitro, particularly Syzygium aromaticum, which exhibited the maximum inhibition (99.48%) and could thus be used for the further biocontrol of cobweb disease. Finally, we identified the bioactive chemical constituents present in S. aromaticum that could potentially be used as a treatment for C. mycophilum infection using Fourier transform infrared (FTIR) spectroscopy. These findings provide new germplasm resources for enhancing A. bisporus breeding and for the identification of botanicals for the biocontrol of cobweb disease.