Peach brown rot, attributed to Monilinia fructicola, presents a significant threat to postharvest peach cultivation, causing losses of up to 80%. With an increasing number of countries, spearheaded by the European Union, imposing bans on chemical agents in fruit production, there is a growing interest in mining highly active antibacterial compounds from biological control strains for postharvest disease management. In this study, we highlight the unique ability of Streptomyces lincolnensis strain JCP1‐7 to inhibit M. fructicola sporulation, despite its limited antimicrobial efficacy. Through GC–MS analysis, eucalyptol was identified as the key compound. Fumigation of diseased fruits with eucalyptol at a concentration of 0.0335 μg cm−3 demonstrated an in vivo inhibition rate against M. fructicola of 93.13%, completely suppressing spore formation. Transcriptome analysis revealed the impact of eucalyptol on multiple pathogenesis‐related pathways, particularly through the inhibition of catalase 2 (Cat2) expression. Experiments with a MfCat2 knockout strain (ΔMfCat2) showed reduced pathogenicity and sensitivity to JCP1‐7 and eucalyptol, suggesting MfCat2 as a potential target of JCP1‐7 and eucalyptol against M. fructicola. Our findings elucidate that eucalyptol produced by S. lincolnensis JCP1‐7 inhibits M. fructicola sporulation by regulating MfCat2, thereby effectively reducing postharvest peach brown rot occurrence. The use of fumigation of eucalyptol offers insights into peach brown rot management on a large scale, thus making a significant contribution to agricultural research.