The phytotoxic pathogenicity factor fusaric acid (FA) represses the production of 2,4-diacetylphloroglucinol (DAPG), a key factor in the antimicrobial activity of the biocontrol strain Pseudomonas fluorescens CHA0. FA production by 12 Fusarium oxysporum strains varied substantially. We measured the effect of FA production on expression of the phlACBDE biosynthetic operon of strain CHA0 in culture media and in the wheat rhizosphere by using a translational phlA'-'lacZ fusion. Only FA-producing F. oxysporum strains could suppress DAPG production in strain CHA0, and the FA concentration was strongly correlated with the degree of phlA repression. The repressing effect of FA on phlA'-'lacZ expression was abolished in a mutant that lacked the DAPG pathway-specific repressor PhlF. One FA-producing strain (798) and one nonproducing strain (242) of F. oxysporum were tested for their influence on phlA expression in CHA0 in the rhizosphere of wheat in a gnotobiotic system containing a sand and clay mineral-based artificial soil. F. oxysporum strain 798 (FA(+)) repressed phlA expression in CHA0 significantly, whereas strain 242 (FA(-)) did not. In the phlF mutant CHA638, phlA expression was not altered by the presence of either F. oxysporum strain 242 or 798. phlA expression levels were seven to eight times higher in strain CHA638 than in the wild-type CHA0, indicating that PhlF limits phlA expression in the wheat rhizosphere.