The ability of P.aeruginosa OM13 in antagonizing or inhibiting the growth of some phytopathogenic fungi was tested by measuring the inhibition zone for the growth of the test fungi (Alternaria alternate, Rhizoctonia solani) caused by the growth of the bacterial isolate (P.aeruginosa OM13 ) and by the action of the culture filtrate of this isolate on test fungi. It was found that this isolate inhibited the growth of the test fungi and the inhibition zone was 5mm, 7mm for A. alternate and R. solani respectively. The plasmid profile for the P.aeruginosa OM13 was studied. The results showed that this isolate has small plasmid DNA bands. In order to determine the role of plasmid in antifungal compound production, firstly, the antibiotic sensitivity disc test was made to find a genetic marker for the curing and transformation experiment. Then the curing experiment was performed by using sodium dodecyl sulfate (SDS) and showed that a number of colonies (4%) had lost their ability to inhibit fungal growth. It was also found that the cured cell became pale (lost its color). Transformation experiment between P.aeruginosa OM13 DNA and E.coli MM294 strain did not succeeded. These results confirm that the antifungal compound production trait in P.aeruginosa OM13 may be chromosomal born. To improve the antifungal compound production by P.aeruginosa OM13, it was treated with mutagenic agent N-methyl-N-nitro-N-nitrosoguanidine (MNNG). Fifty colonies were selected randomly and the antifungal activity of its filtrate was measured by using agar well method and measuring the optical density (O.D) at 520nm. The results reported that the antifungal agent production of 5 isolate was highly increased, in which RA5 gave the highest inhibition zone and O.D520nm values when compared with others. An attempt to characterize the partially purified antifungal compound produced by P.aeruginosa OM13 by using infrared (IR), UV absorbance and thin layer chromatography (TLC) were done and the results showed that the compound appeared as a single dark spot on a TLC plate under UV-light that had Rf value 0.32. From IR, UV analysis it was confirmed that the compound was aromatic and contained aliphatic group. From the results of characterization tests, and depending on the Rf value, color, IR, UV analysis, it can be said that the active antifungal compound might be either pyocyanine which is a derivative of the antibiotic phenazine or might be a new derivative of phenazine.