Phytophthora species cause enormous economic loss every year worldwide. Xenocoumacin 1 (Xcn1), isolated from the bacterium Xenorhabdus nematophilus, is a broad-spectrum antibiotic against agricultural pathogens, especially Phytophthora. To understand the inhibitory mode of Xcn1 toward Phytophthora pathogens, we determined the inhibitory effects of Xcn1 on Phytophthora capsici both in vitro and in vivo. In vitro, Xcn1 inhibited different stages in the life cycle of P. capsici, including sporangium formation, zoospore germination, and mycelial growth, with 50% effective concentration (EC50) values of 0.037, 0.81, and 2.44 μg ml−1, respectively. Xcn1 also reduced zoospore motility. In vivo, Xcn1 efficiently controlled the Phytophthora blight of pepper with a disease reduction of 99% at a concentration of 5 μg ml−1 assessed on the third day after incubation of wound stem plants. In addition, Xcn1-treated P. capsici mycelia exhibited increased mycelial branch spacing, evident plasmolysis, and leakage of intracellular components. In conclusion, in the presence of Xcn1, several stages in the life cycle of P. capsici were inhibited, and the hyphae exhibited obvious morphological changes.