Antifungal activity of the steam distilled essential oil fraction of Artemisia douglasiana was detected by bioautography on silica gel TLC plates against three Colletotrichum spp. The active principle was isolated by bioassay-directed fractionation using column chromatography followed by crystallization and was characterized as vulgarone B by 1H and 13C NMR and GC-MS. Antifungal activity of vulgarone B was further evaluated using 96-well microtiter assay against Colletotrichum acatatum, C. fragariae, C. gloeosporioides, and Botrytis cinerea. In addition, the antifungal activity of vulgarone B and verbenone, and their corresponding alcohols was tested by bioautography and microtiter assay. Structure-activity studies revealed that the alpha, beta-unsaturated carbonyl functionality is a prerequisite for the antifungal activity of these mono and sesquiterpene ketones. This is the first report of antifungal activity of vulgarone B. The yield of essential oil from A. douglasiana is about 0.6-0.8% by weight of the dry material, including plant stems.