Disease suppressive composts are known, yet little information on the potential role of specific microbial antagonist within are available. Arthrobacter humicola isolate M9-1A has been obtained from a compost prepared from marine residues and peat moss. The bacterium is a non-filamentous actinomycete with antagonistic activity against plant pathogenic fungi and oomycetes sharing its ecological niche in agri-food microecosystems. Our objective was to identify and characterize compounds with antifungal activity produced by A. humicola M9-1A. Arthrobacter humicola culture filtrates were tested for antifungal activity in vitro and in vivo and a bioassay-guided approach was used to identify potential chemical determinants of its observed activity against molds. The filtrates reduced the development of lesions of Alternaria rot on tomatoes and the ethyl acetate extract inhibited growth of Alternaria alternata. A compound, arthropeptide B [cyclo-(L-Leu, L-Phe, L-Ala, L-Tyr)], was purified from the ethyl acetate extract of the bacterium. Arthropeptide B is a new chemical structure reported for the first time and has shown antifungal activity against A. alternata spore germination and mycelial growth.