Aspergillus flavus is a ubiquitous saprophyte that is able to produce the most potent natural carcinogenic compound known as aflatoxin B1 (AFB1). This toxin frequently contaminates crops including corn, cotton, peanuts, and tree nuts causing substantial economic loss worldwide. Consequently, more than 100 countries have strict regulations limiting AFB1 in foodstuffs and feedstuffs. Plants and microbes are able to produce volatile compounds that act as a defense mechanism against other organisms. Pichia anomala strain WRL-076 is a biocontrol yeast currently being tested to reduce AF contamination of tree nuts in California. We used the SPME-GC/MS analysis and identified the major volatile compound produced by this strain to be 2-phenylethanol (2-PE). It inhibited spore germination and AF production of A. flavus. Inhibition of AF formation by 2-PE was correlated with significant down regulation of clustering AF biosynthesis genes as evidenced by several to greater than 10,000-fold decrease in gene expression. In a time-course analysis we found that 2-PE also altered the expression patterns of chromatin modifying genes, MYST1, MYST2, MYST3, gcn5, hdaA and rpdA. The biocontrol capacity of P. anomala can be attributed to the production of 2-PE, which affects spore germination, growth, toxin production, and gene expression in A. flavus.