Over the years researchers have had little success in identifying fungicidal agents that are not toxic to mammalian cells. The lack of such antifungal therapeutics underlines the need to look for antifungal agents with new modes of action. While screening for antifungal agents, sphingofungins E and F were isolated from a fermentation of Paecilomyces variotii (ATCC 74097=MF 5537). Sphingofungins E (1) and F (2) are sphingosine-like compounds which inhibit serinepalmitoyl transferase, an enzymeessential in the biosynthesis of sphingolipids. These compounds are novel structures in the sphingofungin family of compounds. The first compounds in the sphingofungin family to be isolated1 ~3) were also serinepalmitoyl transferase inhibitors40. These compounds bear a strong structural resemblance to myriocin (3), also referred to as thermozymocidin, an antifungal compound originally isolated approximately two decades ago5>6) and to fumifungin7).Wereport here on the producing organism, fermentation, isolation, structure determination andbiological activity of these novel sphingofungins.