Findings from previous studies suggest that the quorum sensing signal DSF (diffusible signal factor) negatively regulates biofilm formation in Xanthomonas campestris pv. campestris (Xcc) by affecting the expression of manA encoding biofilm dispersion and an unknown factor(s). In this study, by analysing the double deletion mutant ΔrpfFΔmanA, in which DSF biosynthesis gene rpfF and biofilm dispersal gene manA were deleted, we found that DSF modulated biofilm development by suppression of a mechanism essential for biofilm formation. Transposon mutagenesis of ΔrpfFΔmanA and subsequent analyses led to the identification of a novel gene locus xagABC encoding a putative glycosyl transferase system. Genetic analysis revealed that the transcriptional expression of xagABC was negatively regulated by DSF through the RpfC/RpfG two-component regulatory system. Deletion of the xag genes resulted in decreased extracellular polysaccharide production, abolished Xcc biofilm formation and attenuated the bacterial resistance to oxidative stress. Furthermore, we provide evidence that xagABC and manA were differentially expressed in Xcc and the biofilm formed by overexpression of xagABC in wild-type Xcc could be dispersed by ManA. These results provide new insight into the molecular mechanisms by which Xcc switches between planktonic growth and biofilm lifestyle.