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Alternaria alternatais a common plant pathogen that can infect crops and reduce their production. In this work, an antagonism experiment between A. alternataand the essential oil of arborvitae (Platycladus orientalis) was performed, and it was proven that A. alternatahad developed resistance to this plant-derived fungicide. A. alternatafacilitated the biotransformation of hinokitiol (1), the main antifungal compound in the essential oil of arborvitae, into (R)-2-hydroxy-β-methylbenzeneethanol (2), which does not have antifungal activity against A. alternata. This biotransformation is an unusual ring-contraction reaction that was verified to be catalyzed by P450 enzyme hydroxylation and Baeyer–Villiger oxidation. In addition, the P450 enzyme inhibitors 1-aminobenzotriazole and piperonyl butoxide effectively prevented the destruction of the hinokitiol structure by A. alternata, and the combined use of these P450 enzyme inhibitors significantly increased the antifungal activity of hinokitiol. This work provides a theoretical reference for the further development of botanical fungicides.