The efficacy of an antibiotic paromomycin in encapsulated form with kaolin alginate and non-encapsulated paromomycin was studied for the control of two important pathogens, Pectobacterium carotovorum SCC1 (SCC1) and Phytophthora capsici in chili-pepper through systemic resistance under greenhouse conditions. Paromomycin, one of the antibiotic depsipetides isolated from Streptomyces sp. AMG-P1 (AMG-P1), can be used as one of the biocontrol agents to suppress the soilborne diseases in Korea. The compound was granulated with sodium alginate-kaolin by immobilization technique. The treatment at 0.1-10µg/g soil exhibited strong activity against P. capsici and P. carotovorum SCC1. After treatment with non-encapsulated paromomycin or encapsulated paromomycin, upon pathogen challenge, there was a greater reduction of soft rot and phytophthora blight infections caused by Pectobacterium carotovorum SCC1 and Phytophthora capsici, respectively, through systemic resistance. There was an increased reduction of soft rot infection in whole leaf bioassay significantly, when chili-pepper plants were treated with encapsulated paromomycin beads in granular form. While, there was a lower disease reduction in the treatments with BTH (0.1mM) and untreated control. The treatment with encapsulated paromomycin reduced the disease severity of phytophthora blight significantly (P<0.05) at lower dosage compared to non encapsulated paromomycin, where the reduced disease severity was observed at 1.0ppm concentration. This is the first report that the immobilized paromomycin with kaolin exhibits protection against plant pathogens. Hence, AMG-P1 can play a role in enhancing plant defense by secretion of ISR elicitors including paromomycin.