The suppressive effect of vermicomposted-bamboo powder (VB) derived from waste bamboo shoots on cucumber damping-off when VB is used as a nursery medium was characterized. A greenhouse inoculation experiment showed that the damping-off caused by each strain of Pythium aphanidermatum, P. ultimum var. ultimum, and Rhizoctonia solani AG1-IB was significantly reduced by VB compared to an autoclaved vermicomposted-bamboo powder (aVB) and a commercial-nursery medium (CNM). Due to the fact that the disease suppressiveness of VB was nulled by autoclaving, the soil biological factors were characterized with respect to those of the CNM by fluorescein diacetate (FDA) hydrolysis reactions, plate count techniques, and next-generation sequencing (NGS) analysis using prokaryotic universal primers. The FDA hydrolysis reaction and the plate count techniques showed that VB has a higher microbial activity and population density of fungi and bacteria than aVB and CNM. The NGS analysis revealed that the bacterial diversity was higher in VB than in aVB and CNM. In addition, the higher concentrations of NH4+ in VB may be related to the Pythium damping-off suppression. This is the first report on the suppressive effect of VB on the damping-off disease, which is at least partially due to its rich microbial activity and diversity.