'Candidatus Liberibacter asiaticus' is transmitted by psyllids and causes huanglongbing (HLB), a lethal disease of citrus. Most pathogenic 'Ca. L. asiaticus' strains carry two nearly identical prophages similar to SC1 and SC2 in strain UF506. SC2 was observed to replicate as a moderately high-copy excision plasmid encoding a reactive oxygen species-scavenging peroxidase (SC2_gp095), a predicted lysogenic conversion factor. SC2_gp095 was expressed at significantly higher levels in periwinkle than in citrus and was suppressed in psyllids. SC2_gp095 was cloned in a shuttle vector and transformed into Escherichia coli and Liberibacter crescens, a culturable proxy for 'Ca. L. asiaticus'. Transformed L. crescens cells showed 20 to 25% enhanced resistance to H₂O₂on agar plates, 47% greater enzymatic activity, and enhanced growth in liquid cultures. A nonclassical secretion potential was predicted for SC2_gp095 and secretion from L. crescens was confirmed by enzymatic and Western blot analyses. Transient expression of SC2_gp095 in planta resulted in strong transcriptional downregulation of RbohB, the key gatekeeper of the H₂O₂-mediated defense signaling in plants, helping explain the surprisingly long incubation period (years) before HLB symptoms appear in 'Ca. L. asiaticus'-infected citrus. 'Ca. L. asiaticus' peroxidase is likely a secreted, horizontally acquired effector that suppresses host symptom development, a tactic used by most biotrophic plant pathogens.