Gray mold disease, induced by Botrytis cinerea, is the main cause of strawberry decay. In the current study, the ability and mechanism of aquatic yeast, Yarrowia lipolytica MBC25, to control B. cinerea in strawberries were studied in vitro, in vivo, in the greenhouse, and during storage. In vitro and in vivo experiments revealed that 108 CFU/ml Y. lipolytica had the strongest inhibitory effect against B. cinerea. In vitro studies showed Y. lipolytica inhibited 22 and 85 % of B. cinerea growth in dual culture and volatile metabolite tests, respectively. Y. lipolytica showed the capability to produce fungal pathogen cell wall degrading enzymes (protease, lipase, and chitinase), siderophores, and plant growth promoters (indole-3-acetic acid and gibberellin). Y. lipolytica could establish, survive, and proliferate on strawberry plants and fruit in the greenhouse and during storage. Inoculated yeast reduced gray mold incidence in the greenhouse by 80 %, which was comparable to the commercial fungicide, while Y. lipolytica inhibited gray mold during postharvest fruit storage, which was more than commercial fungicide. Y. lipolytica inoculated fruit also showed higher contents of total phenol, flavonoids, and enzymes such as superoxide dismutase, peroxidase, and phenylalanine ammonia-lyase. These findings suggest that Y. lipolytica may act via volatile metabolites and induce defense systems in the host plant via higher bioactive compounds and antioxidant enzymes. Pre-harvest application of Y. lipolytica has been shown to be a promising alternative to chemical fungicides in the management of strawberry gray mold disease.