Benzylinedeneacetone (BZA) is a bacterial metabolite which is synthesized by at least two entomopathogenic bacteria, namely Xenorhabdus nematophila and Photorhabdus temperata subsp. temperata. It has been shown to possess inhibitory effects on insect cellular and humoral immune responses as well as antimicrobial activities against various species of bacteria and fungi. However, its relatively high phytotoxicity, and nonsystematic effect have thus far prevented its development into an optimal pesticide. This study screened five different BZA derivatives in order to select an optimal compound, which would have relatively high solubility and low phytotoxicity while retaining sufficient degrees of the immunosuppressive and antimicrobial activities associated with BZA. Hydroxylation of the benzene ring of BZA was found to significantly suppress its immunosuppressive and antimicrobial activities. Transformation of the ketone of BZA by carboxylation also suppressed the inhibitory activities. However, a shortening of the aliphatic chain of BZA into acetate form (4-hydroxyphenylacetic acid: HPA) did not decrease the inhibitory activity. HPA also showed much less phytotoxicity against the hot pepper plant Capsicum annuum, when compared to BZA. This study identified an optimal BZA derivative, which exhibited relatively little phytotoxicity, but retained a high degree of inhibitory activity to suppress insect immune responses and antimicrobial activities against plant pathogens.