The antifungal substances SH-1 and SH-2 were isolated from Streptomyces humidus strain S5-55 cultures by various purification procedures and identified as phenylacetic acid and sodium phenylacetate, respectively, based on the nuclear magnetic resonance, electron ionization mass spectral, and inductively coupled plasma mass spectral data. SH-1 and SH-2 completely inhibited the growth of Pythium ultimum, Phytophthora capsici, Rhizoctonia solani, Saccharomyces cerevisiae, and Pseudomonas syringae pv. syringae at concentrations from 10 to 50 microg/ml. The two compounds were as effective as the commercial fungicide metalaxyl in inhibiting spore germination and hyphal growth of P. capsici. However, the in vivo control efficacies of the two antifungal compounds against P. capsici infection on pepper plants were similar to those of H(3)PO(3) and fosetyl-AI but less than that of metalaxyl.