Culture filtrates of five strains of Clitocybe nuda displayed various degrees of antimicrobial activity against plant pathogenic fungi and/or bacteria tested. The culture filtrate of C. nuda strain LA82 was very effective in reducing the incidence of Phytophthora blight of pepper caused by Phytophthora capsici and the incidence of leaf spot on pepper caused by Xanthomonas axonopodis pv. vesicatoria. The inhibitory substance in the C. nuda strain LA82 culture filtrate was stable at low and high pH. It was also stable at high temperature. The inhibitory substance was dialyzable in the membrane tubing with molecular weight cut-off of 1000 but not 500 or 100. It was also exchangeable by anion but not cation exchange resins, indicating that the inhibitor has a molecular weight between 1000 and 500, and negative charge on its molecule. The inhibitor is a hydrophilic compound, but not a protein.