Algicidal bacteria have been turned out to be available for inhibiting Phaeocystis globosa which frequently caused harmful algal blooms and threatened to economic development and ecological balance. A marine bacterium Bacillus sp. Ts-12 exhibited significant algicidal activity against P. globosa by indirect attack. In present study, an algicidal compound was isolated by silica gel column, Sephadex G-15 column and HPLC, further identified as hexahydropyrrolo[1,2-a]pyrazine- 1,4-dione, cyclo-(Pro-Gly), by GC-MS and 1H-NMR. Cyclo-(Pro-Gly) significantly increased the level of reactive oxygen species (ROS) within P. globosa cells, further activating the enzymatic and non-enzymatic antioxidant systems, including superoxide dismutase (SOD), catalase (CAT), glutathione (GSH) and ascorbic acid (AsA). The increase in methane dicarboxylic aldehyde (MDA) content showed that the surplus ROS induced lipid peroxidation on membrane system. Transmission electron microscope (TEM) and flow cytometry (FCM) analysis revealed that cyclo-(Pro-Gly) caused reduction of Chl-a content, destruction of cell membrane integrity, chloroplasts and nuclear structure. Real-time PCR assay showed that the transcriptions of photosynthesis related genes (psbA, psbD, rbcL) were significantly inhibited. This study indicated that cyclo-(Pro-Gly) from marine Bacillus sp. Ts-12 exerted photosynthetic inhibition and oxidative stress to P. globosa and eventually led to the algal cells lysis. This algicidal compound might be potential bio-agent for controlling P. globosa red tide.