Reactive oxygen species (ROS) are responsible for mediating cellular defense responses in plants. Controversy has existed over the origin of ROS in plant defense. We have isolated a novel extracellular peroxidase gene, CaPO2, from pepper (Capsicum annuum). Local or systemic expression of CaPO2 is induced in pepper by avirulent Xanthomonas campestris pv vesicatoria (Xcv) infection. We examined the function of the CaPO2 gene in plant defense using the virus-induced gene silencing technique and gain-of-function transgenic plants. CaPO2-silenced pepper plants were highly susceptible to Xcv infection. Virus-induced gene silencing of the CaPO2 gene also compromised hydrogen peroxide (H(2)O(2)) accumulation and hypersensitive cell death in leaves, both locally and systemically, during avirulent Xcv infection. In contrast, overexpression of CaPO2 in Arabidopsis (Arabidopsis thaliana) conferred enhanced disease resistance accompanied by cell death, H(2)O(2) accumulation, and PR gene induction. In CaPO2-overexpression Arabidopsis leaves infected by Pseudomonas syringae pv tomato, H(2)O(2) generation was sensitive to potassium cyanide (a peroxidase inhibitor) but insensitive to diphenylene iodonium (an NADPH oxidase inhibitor), suggesting that H(2)O(2) generation depends on peroxidase in Arabidopsis. Together, these results indicate that the CaPO2 peroxidase is involved in ROS generation, both locally and systemically, to activate cell death and PR gene induction during the defense response to pathogen invasion.