Phytophthora root and stem rot of soybean [Glycine max (L.) Merr.] caused by Phytophthora sojae is a destructive disease worldwide. Phenylalanine ammonia-lyase (PAL) is one of the most extensively studied enzymes related to plant responses to biotic and abiotic stresses. However, the molecular mechanism of PAL in soybean in response to P. sojae is largely unclear. Here, we characterize a novel member of the soybean PAL gene family, GmPAL2.1, which is significantly induced by P. sojae. Overexpression and RNA interference analysis demonstrates that GmPAL2.1 enhances resistance to P. sojae in transgenic soybean plants. In addition, the PAL activity in GmPAL2.1-OX transgenic soybean is significantly higher than that of non-transgenic plants after infection with P. sojae, while that in GmPAL2.1-RNAi soybean plants is lower. Further analyses show that the daidzein, genistein and salicylic acid (SA) levels and the relative content of glyceollins are markedly increased in GmPAL2.1-OX transgenic soybean. Taken together, these results suggest the important role of GmPAL2.1 functioning as a positive regulator in the soybean response to P. sojae infection, possibly by enhancing the content of glyceollins, daidzein, genistein and SA.