The main component of orange peel essential oil is limonene. Limonene is a natural active monoterpene with multiple functions, such as antibacterial, antiseptic and antitumor activity, and has important development value in agriculture. This study found that limonene exhibited excellent anti-tobacco mosaic virus (TMV) bioactivity, with results showing that its protection activity, inactivation activity, and curative activity at 800 μg/mL were 84.93%, 59.28%, and 58.89%, respectively—significantly higher than those of chito-oligosaccharides. A direct effect of limonene on TMV particles was not observed, but limonene triggered the hypersensitive response (HR) in tobacco. Further determination of the induction activity of limonene against TMV demonstrated that it displayed good induction activity at 800 μg/mL, with a value of 60.59%. The results of physiological and biochemical experiments showed that at different treatment days, 800 μg/mL limonene induced the enhancement of defense enzymes activity in tobacco, including of SOD, CAT, POD, and PAL, which respectively increased by 3.2, 4.67, 4.12, and 2.33 times compared with the control (POD and SOD activities reached highest on the seventh day, and PAL and CAT activities reached highest on the fifth day). Limonene also enhanced the relative expression levels of pathogenesis related (PR) genes, including NPR1, PR1, and PR5, which were upregulated 3.84-fold, 1.86-fold and 1.71-fold, respectively. Limonene induced the accumulation of salicylic acid (SA), and increased the relative expression levels of genes related to SA biosynthesis (PAL) and reactive oxygen species (ROS) burst (RBOHB), which respectively increased by 2.76 times and 4.23 times higher than the control. Systemic acquired resistance (SAR) is an important plant immune defense against pathogen infection. The observed accumulation of SA, the enhancement of defense enzymes activity and the high-level expression of defense-related genes suggested that limonene may induce resistance to TMV in tobacco by activating SAR mediated by the SA signaling pathway. Furthermore, the experimental results demonstrated that the expression level of the chlorophyll biosynthesis gene POR1 was increased 1.72-fold compared to the control in tobacco treated with 800 μg/mL limonene, indicating that limonene treatment may increase chlorophyll content in tobacco. The results of pot experiment showed that 800 μg/mL limonene induced plant resistance against Sclerotinia sclerotiorum (33.33%), Phytophthora capsici (54.55%), Botrytis cinerea (50.00%). The bioassay results indicated that limonene provided broad-spectrum and long-lasting resistance to pathogen infection. Therefore, limonene has good development and utilization value, and is expected to be developed into a new botanical-derived anti-virus agent and plant immunity activator in addition to insecticides and fungicides.