The secondary metabolites of endophytic Phomopsis sp. strain S4 show antifungal activity against a variety of plant pathogens, which implies that strain S4 has potential prospect in crop disease control. The aim of this study was to explore the inhibition mechanisms of S4 against plant pathogenic fungi. Magnaporthe oryzae was used as the main pathogenic material for the research. Cell membrane changes were detected using antifungal experiments, scanning electron microscopy, Q RT-PCR, and cell content leaking experiments. The results of scanning electron microscopy showed that M. oryzae mycelia, after treatment with S4 fermented product extract, decreased in size, suggesting the integrity of the cell membrane was destroyed. The genes related to ergosterol synthesis, which plays an important role in membrane integrity, were studied though Q RT-PCR. The results showed that the expression levels of ERG1, ERG11, and ERG6 genes were down-regulated by 2.0, 1.40, and 2.7-fold, respectively, whereas that of ERG7 was up-regulated by 1.38-fold, which means the ergosterol synthesis pathway was destroyed. The physiological experiments also showed that the cell contents of M. oryzae mycelia treated with S4 fermented product extract leaked significantly, which was consistent with the Q RT-PCR results. The results showed that S4 fermentation broth exact could destroy the cell membrane integrity by inhibiting ergosterol synthesis, and eventually inhibit M. oryzae cell growth.