Many bacterial pathogens of plants and animals deliver effector proteins into host cells to promote infection. Elucidation of how pathogen effector proteins function not only is critical for understanding bacterial pathogenesis but also provides a useful tool in discovering the functions of host genes. In this study, we characterized the Pseudomonas syringae pv tomato DC3000 effector protein Avirulence Protein E (AvrE), the founding member of a widely distributed, yet functionally enigmatic, bacterial effector family. We show that AvrE is localized in the plasma membrane (PM) and PM-associated vesicle-like structures in the plant cell. AvrE contains two physically interacting domains, and the amino-terminal portion contains a PM-localization signal. Genome-wide microarray analysis indicates that AvrE, as well as the functionally redundant effector Hypersensitive response and pathogenicity-dependent Outer Protein M1, down-regulates the expression of the NONRACE-SPECIFIC DISEASE RESISTANCE1/HARPIN-INDUCED1-LIKE13 (NHL13) gene in Arabidopsis (Arabidopsis thaliana). Mutational analysis shows that NHL13 is required for plant immunity, as the nhl13 mutant plant displayed enhanced disease susceptibility. Our results defined the action site of one of the most important bacterial virulence proteins in plants and the antibacterial immunity function of the NHL13 gene.