The study identified a negative-strand RNA virus, Valsa mali negative-strand RNA virus 1 (VmNSRV1), which is prevalent in the phytopathogenic fungus *Valsa mali* causing apple Valsa canker in apple orchards in Shaanxi Province, China. VmNSRV1 induces hypovirulence in *V. mali* and can infect plants, as evidenced by its detection in 24 out of 139 apple trees tested. The virus was found to be bidirectionally transmitted between apple plants and *V. mali*, reducing fungal lesion development on leaves. VmNSRV1 encodes a protein with a viral cell-to-cell movement function in plant tissue and rearranges lipid droplets in both fungal and plant cells. This virus represents a "phyto-mycovirus," adapting and spreading between plant and fungal hosts, and has potential as a biocontrol agent for apple Valsa canker disease.The study identified a negative-strand RNA virus, Valsa mali negative-strand RNA virus 1 (VmNSRV1), which is prevalent in the phytopathogenic fungus *Valsa mali* causing apple Valsa canker in apple orchards in Shaanxi Province, China. VmNSRV1 induces hypovirulence in *V. mali* and can infect plants, as evidenced by its detection in 24 out of 139 apple trees tested. The virus was found to be bidirectionally transmitted between apple plants and *V. mali*, reducing fungal lesion development on leaves. VmNSRV1 encodes a protein with a viral cell-to-cell movement function in plant tissue and rearranges lipid droplets in both fungal and plant cells. This virus represents a "phyto-mycovirus," adapting and spreading between plant and fungal hosts, and has potential as a biocontrol agent for apple Valsa canker disease.