Most Gram-negative phytopathogenic bacteria inject type III effector (T3E) proteins into plant cells to manipulate signaling pathways to the pathogen's benefit. In resistant plants, specialized immune receptors recognize single T3Es or their biochemical activities, thus halting pathogen ingress. However, molecular function and mode of recognition for most T3Es remains elusive. Here, we show that the Xanthomonas T3E XopH possesses phytase activity, i.e., dephosphorylates phytate (myo-inositol-hexakisphosphate, InsP6), the major phosphate storage compound in plants, which is also involved in pathogen defense. A combination of biochemical approaches, including a new NMR-based method to discriminate inositol polyphosphate enantiomers, identifies XopH as a naturally occurring 1-phytase that dephosphorylates InsP6 at C1. Infection of Nicotiana benthamiana and pepper by Xanthomonas results in a XopH-dependent conversion of InsP6 to InsP5. 1-phytase activity is required for XopH-mediated immunity of plants carrying the Bs7 resistance gene, and for induction of jasmonate- and ethylene-responsive genes in N. benthamiana.