The 3-ketoacyl-ACP synthase III (FabH), a key enzyme for bacteria growth, catalyses the last step of the initiation of bacterial fatty acid synthesis. Rice bacterial blight is caused by the pathogen Xanthomonas oryzae pv. oryzae (Xoo), which is widely studied as a model bacterium. Bioinformatics analysis showed that the X. oryzae pv. oryzae PXO99A genome encodes three FabH homologous proteins with unknown functions. In this study, we found that only PXO_02706 (fabH1) encodes a functional FabH, the key enzyme in the production of branched-chain fatty acid, which is essential for the branched-chain diffusible signal factor family signals in Xoo. Interestingly, we found that FabH1 is not essential for fatty acid biosynthesis in Xoo. Pathogenicity analysis showed that loss of fabH1 caused a significant decrease in virulence of Xoo. Genetic and phenotypic analyses revealed that fabH1 plays a key role in multiple Xoo virulence-related activities, including exopolysaccharide (EPS) production, biofilm formation, motility, and resistance to environmental stresses.