Although bacterial small noncoding RNAs (sRNAs) are known to play a critical role in various cellular processes, including pathogenesis, the identity and action of such sRNAs are still poorly understood in many organisms. Here we have performed a genome‐wide screen and functional analysis of the sRNAs in Xanthomonas campestris pv. campestris (Xcc), an important phytopathogen. The 50–500‐nt RNA fragments isolated from the wild‐type strain grown in a virulence gene‐inducing condition were sequenced and a total of 612 sRNA candidates (SRCs) were identified. The majority (82%) of the SRCs were derived from mRNA, rather than specific sRNA genes. A representative panel of 121 SRCs were analysed by northern blotting; 117 SRCs were detected, supporting the contention that the overwhelming majority of the 612 SRCs identified are indeed sRNAs. Phenotypic analysis of strains overexpressing different candidates showed that a particular sRNA, RsmU, acts as a negative regulator of virulence, the hypersensitive response, and cell motility in Xcc. In vitro electrophoretic mobility shift assay and in vivo coimmunoprecipitation analyses indicated that RsmU interacted with the global posttranscriptional regulator RsmA, although sequence analysis displayed that RsmU is not a member of the sRNAs families known to antagonize RsmA. Northern blotting analyses demonstrated that RsmU has two isoforms that are processed from the 3′‐untranslated region of the mRNA of XC1332 predicted to encode ComEA, a periplasmic protein required for DNA uptake in bacteria. This work uncovers an unexpected major sRNA biogenesis strategy in bacteria and a hidden layer of sRNA‐mediated virulence regulation in Xcc. The RsmA‐sequestering noncoding RNA RsmU derived from the 3′‐UTR of XC1332 mRNA negatively regulates virulence, the hypersensitive response, and cell motility in Xanthomonas campestris.