This research aimed to investigate natamycin’s antifungal effect and its mechanism against the chestnut pathogen Neofusicoccum parvum. Natamycin’s inhibitory effects on N. parvum were investigated using a drug-containing plate culture method and an in vivo assay in chestnuts and shell buckets. The antifungal mechanism of action of natamycin on N. parvum was investigated by conducting staining experiments of the fungal cell wall and cell membrane. Natamycin had a minimum inhibitory concentration (MIC) of 100 μg/mL and a minimum fungicidal concentration (MFC) of 200 μg/mL against N. parvum. At five times the MFC, natamycin had a strong antifungal effect on chestnuts in vivo, and it effectively reduced morbidity and extended the storage period. The cell membrane was the primary target of natamycin action against N. parvum. Natamycin inhibits ergosterol synthesis, disrupts cell membranes, and causes intracellular protein, nucleic acid, and other macromolecule leakages. Furthermore, natamycin can cause oxidative damage to the fungus, as evidenced by decreased superoxide dismutase and catalase enzyme activity. Natamycin exerts a strong antifungal effect on the pathogenic fungus N. parvum from chestnuts, mainly through the disruption of fungal cell membranes.