[Objective] Inhibition mechanism of the antifungal substances from Chaetomium globosum ND35 against pathogenic fungi of Valsa canker was investigated.[Method] The inhibitory effect of antifungal substances (AFS) produced by endophytic C. globosum ND35 on pathogenic fungi of Valsa canker was studied by means of dual culture,extraction,thin layer chromatography and bioassay of antifungal activity. [Result] The crude extracts of AFS could strongly inhibit Valsa sordida and V. mali. The suppression percentage of mycelial growth of two pathogenic fungi were 66.4% and 72.6%,respectively. The inhibition percentages of conidia germination of two pathogenic fungi were 92.2% and 80.4%,respectively. Separation of thin layer chromatography and bioassay of antifungal activity indicated that the fraction No.2 of AFS played an important role in the process of inhibition on pathogenic fungi,causal agents of Valsa canker. [Conclusion] The antifungal substances from C. globosum ND35 is potential for biological control on Valsa canker.