Viridiofungins are broad spectrum antifungal agents that inhibit the squalene synthase in vitro, but do not specifically inhibit fungal ergosterol synthesis in whole cells, indicating a different mode of action for antifungal activity. In this report, we show that viridiofungins are potent in vitro inhibitors of serine palmitoyltransferase, the first committed enzyme in Sphingolipid biosynthesis, and their antifungal activity is due to inhibition of Sphingolipid synthesis. Additional related components with the same mode of action were isolated from the producing culture, Trichoderma viride, and inhibition of the serine palmitoyltransferase and antifungal activity is presented.