Many species of bacteria secrete natural products that inhibit the growth or development of competing species. In turn, competitors may develop or acquire resistance to antagonistic molecules. Few studies have investigated the interplay of these countervailing forces in direct competition between two species. We have used an imaging mass spectrometry (IMS) approach to track metabolites exchanged between Bacillus subtilis and Streptomyces sp. Mg1 cultured together. Surfactin is a cyclic lipopeptide produced by B. subtilis that inhibits the formation of aerial hyphae by streptomycetes. IMS analysis exposed an addition of 18 mass units to surfactin in the agar proximal to Streptomyces sp. Mg1 but not other streptomycetes tested. The spatially resolved change in the mass of surfactin indicated hydrolysis of the molecule. We observed that the aerial growth of Streptomyces sp. Mg1 was resistant to inhibition by surfactin, which suggests that hydrolysis was a mechanism of resistance. To identify possible enzymes from Streptomyces sp. Mg1 with surfactin hydrolase activity, we isolated secreted proteins and identified candidates by mass spectrometry. We purified one candidate enzyme that hydrolyzed surfactin in vitro. We tested the role of this enzyme in surfactin resistance by deleting the corresponding gene from the S. Mg1 genome. We observed that aerial growth by the ΔsfhA mutant strain was now sensitive to surfactin. Our results identify an enzyme that hydrolyzes surfactin and confers resistance to aerial growth inhibition, which demonstrates the effective use of an IMS approach to track natural product modifications during interspecies competition.