Effects of chitosan andAspergillus flavusto enhance elicitation of phenolic compounds in viable peanut seeds were conducted at two water activity levels.In vitroeffects of phenolic acids onA. flavusgrowth and aflatoxin B1production were also studied. Chitosan enhanced elicitation of free phenolic compounds (FPC) at Aw .85 and .95 levels.A. flavusinitially decreased and subsequently increased FPC content, but bound phenolic compounds (BPC) decreased during incubation. Chitosan +A. flavustreatment caused an increase in FPC reaching a plateau between 24–48 h at Aw .85 while BPC levels increased over the same period at both Aw levels. Major free and bound phenolic acids detected were p‐coumaric, ferulic and an unknown phenolic acid eluting at a retention time of 22 min. Generally, chitosan significantly enhanced elicitation of free ferulic and p‐coumaric acids and bound p‐coumaric acid at Aw .95. Free unknown phenolic and bound ferulic acids at Aw .85 were enhanced by chitosan.A. flavuscaused significant induction of bound p‐coumaric and ferulic acids and free unknown phenol at Aw .85. Chitosan +A. flavusenhanced free p‐coumaric (3 h) and unknown phenolic acids and bound p‐coumaric acid at Aw .95 while bound ferulic acid was enhanced at Aw .85. Chitosan limitedA. flavusgrowth and subsequent aflatoxin production by inducing susceptible tissues to produce more preformed phenolic compounds.