The regulation of gene expression via post-transcriptional modification by RNA-binding proteins is crucial for plant disease and innate immunity. Here, we report the identification of the pepper (Capsicum annuum) RNA-binding protein1 gene (CaRBP1) as essential for hypersensitive cell death and defense signaling in the cytoplasm. CaRBP1 contains an RNA recognition motif and is rapidly and strongly induced in pepper by avirulent Xanthomonas campestris pv. vesicatoria (Xcv) infection. CaRBP1 displays in vitro RNA- and DNA-binding activity and in planta nucleocytoplasmic localization. Transient expression of CaRBP1 in pepper leaves triggers cell-death and defense responses. Notably, cytoplasmic localization of CaRBP1, mediated by the N-terminal region of CaRBP1, is essential for the hypersensitive cell-death response. Silencing of CaRBP1 in pepper plants significantly enhances susceptibility to avirulent Xcv infection. This is accompanied by compromised hypersensitive cell death, production of reactive oxygen species in oxidative bursts, expression of defense marker genes and accumulation of endogenous salicylic acid and jasmonic acid. Over-expression of CaRBP1 in Arabidopsis confers reduced susceptibility to infection by the biotrophic oomycete Hyaloperonospora arabidopsidis. Together, these results suggest that cytoplasmic localization of CaRBP1 is required for plant signaling of hypersensitive cell-death and defense responses.