PF1163A and B are a pair of antifungal agents isolated from a fermentation broth of Penicillium sp. PF1163A inhibited ergosterol synthesis in Saccharomyces cerevisiae, resulting in an accumulation of 4,4-dimethylzymosterol and a decrease of ergosterol. The ERG25 strain overexpressing the ERG25 gene was resistant to PF1163A. ERG25p is a C-4 sterol methyl oxidase known to be essential for the viability of yeast and fungi because of the known role of ERG25 gene disruption in S. cerevisiae-led lethality. ERG25p is the enzyme responsible for the first step in the removal of the two methyl groups at the C-4 position of sterol. From the results obtained here, we conclude that PF1163A is a novel natural antifungal that inhibits C-4 sterol methyl oxidase.