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Abstract The diversification of effector function, driven by a co-evolutionary arms race, enables pathogens to establish compatible interactions with hosts. Structurally conserved plant pathogenesis-related PR-1 and PR-1-like (PR-1L) proteins are involved in plant defense and fungal virulence, respectively. It is unclear how fungal PR-1L counters plant defense. Here, we show that Ustilago maydis UmPR-1La and yeast ScPRY1, with conserved phenolic resistance functions, are Ser/Thr-rich region mediated cell-surface localization proteins. However, UmPR-1La has gained specialized activity in sensing phenolics and eliciting hyphal-like formation to guide fungal growth in plants. Additionally, U. maydis hijacks maize cathepsin B-like 3 (CatB3) to release functional CAPE-like peptides by cleaving UmPR-1La’s conserved CNYD motif, subverting plant CAPE-primed immunity and promoting fungal virulence. Surprisingly, CatB3 avoids cleavage of plant PR-1s, despite the presence of the same conserved CNYD motif. Our work highlights that UmPR-1La has acquired additional dual roles to suppress plant defense and sustain the infection process of fungal pathogens.