Rapamycin, an antifungal antibiotic produced by Streptomyces hygroscopicus showed a strong candicidal activity, which could not be reversed by sterols. It had no effect on efflux of K⁺, Pi or U.V. absorbing materials and cell permeability of Candida albicans. Thus, in its action it differs from the polyenes. Mechanism of action of rapamycin appears to be different from many known antifungal agents. In C. albicans, rapamycin at the minimum growth inhibitory concentration inhibited: 1) phosphate incorporation into nucleic acids, 2) acetate incorporation into lipids and 3) substrate respiration of amino acids. The effect on amino acid metabolism was expressed as inhibition of oxidative deamination. At low concentrations rapamycin caused degradation of P³²-labeled intracellular macromolecules. Inhibition of threonine incorporation into cell wall and leucine incorporation into cellular protein was observed at relatively higher concentrations of rapamycin. The antibiotic showed no effect on cell-free protein synthesizing systems of Escherichia coli, rat liver and C. albicans and in the mitochondrial enzyme systems. Whether the lethal action of rapamycin on C. albicans is primarily due to one of the above effects or is the result of combined effect on some of these biosynthetic parameters remains to be established.