Rice blast disease, caused by Pyricularia oryzae, is the most important disease concerning rice worldwide. Control strategies against P. oryzae in rice mainly involve the application of chemical fungicides and resistant cultivars. However, new strains of the pathogen appear to be able to overcome the resistance genes in currently grown cultivars. Therefore, there is a need to identify natural compounds and develop new agents to control P. oryzae. This study evaluated the inhibitory activity of the isolate 1-86, isolated from soil in Kumejima islamd. in Okinawa prefecture against P. oryzae. The isolate 1-86 did not inhibit the mycelial growth of P. oryzae by dual culture method. However, its presence induced abnormal spherical structure of the hyphal tip of P. oryzae. When the direct effects of the cell extract of isolate 1-86 (1-86-CE) was determined by investigating the germination of P. oryzae conidia, induction of abnormal formation and melanization suppresion of appressorium were observed in the presence of 1-86-CE. Sequence analysis of the 16S rDNA region of isolate 1-86 revealed high similarity with the genus Streptomyces. The active compounds in 1-86-CE was ethyl acetate-insoluble and heat-stable. Futhermore, 1-86-CE significantly suppressed blast lesion development in rice plants. These results strongly suggest that the inhibitory effects of 1-86-CE on plant pathogenic fungi may contribute to the development of new fungicide agents to control plant diseases caused by plant pathogens such as P. oryzae.