Armillaria gallica (A. gallica) is a fungus with both medicinal and edible properties. Previous transcriptome analysis has identified the C2H2-type zinc finger transcription factor as a candidate gene involved in the NAA-induced growth promotion of A. gallica. However, the molecular mechanism underlying the enhancement of A. gallica growth by C2H2 transcription factor in response to NAA treatment remains unclear. In this study, we identified a C2H2-type zinc finger transcription factor gene in A. gallica and investigated its function, aiming to elucidate the mechanism by which C2H2-type zinc finger transcription factors regulate the growth of A. gallica. We identified and characterized a novel C2H2-type zinc finger transcription factor, AgZFP48, in A. gallica and found that AgZFP48 is located in the nucleus, where it acts as a transcription activator. AgZFP48 positively regulated the growth of A. gallica. The potential targets of AgZFP48 were identified by using DNA affinity purification sequencing (DAP-seq). In addition, four candidate genes were selected for Electrophoretic Mobility Shift Assays (EMSA) and luciferase reporter activity assessment. The results showed that AgZFP48 activated the expression of ammonium transporter (AgAMT), glutamine synthetase (AgGS), acetylornithine aminotransferase (AgAcOAT), and amino acid permease (AgAAP) by binding to their promoters or exons. In summary, our results suggest that AgZFP48 promotes nitrogen metabolism in A. gallica by activating the expression of nitrogen metabolism-related genes, thereby regulating the growth of the fungus.