Abstract: Root-knot nematode disease is one of the most severe threats to agricultural development. Currently, the main strategy for managing this illness is the use of chemical nematicides. However, these compounds have disadvantages such as short-term efficacy, soil contamination, and high toxicity. Shrimp shell powder, a by-product of shrimp processing, is rich in proteins, chitin, lipids, and trace elements, exhibiting significant potential for high-value applications. However, it is still mostly utilized in low-value applications, and the utilization rate is still low. In this study, we developed an eco-friendly preparation process for Purpureocillium lilacinum agents through solid-state fermentation of shrimp shell powder, which exhibits prolonged efficacy, high nematocidal activity, and low toxicity. Through single-factor experiments and response surface methodology optimization, the optimal culture conditions for P. lilacinum were determined as follows: shrimp shell powder content of 26%, solid-to-liquid ratio of 2.26, urea concentration of 0.17%, sucrose concentration of 2.12%, incubation temperature of 28 ℃, and inoculation amount of 10⁶ CFU. Under these conditions, the spore load reached 1.14×10¹⁰ CFU·g⁻¹. Bioassay results demonstrate that the agent achieved over 97% inhibition of egg hatching and 100% mortality rate against second-stage juveniles (J2) of root-knot nematodes. Greenhouse pot trials demonstrate that P. lilacinum agent, supernatant sand crude extract achieved 70%−90% control efficacy against root-knot nematodes in substrate culture systems. The results provide valuable insights for the high-value utilization of shrimp processing by-products and the sustainable biological control of root-knot nematodes.