Many small G proteins require post-translational modification to allow functional association to the cell membrane. This process often involves the enzymic addition of hydrophobic prenyl groups to a conserved cysteine residue near the C-terminus of the protein. The enzymes that catalyse these reactions include protein farnesyltransferase and protein geranylgeranyltransferases. The human fungal pathogen Cryptococcus neoformans requires functional Ras and Rho proteins in order to undergo normal growth and differentiation. Since farnesylation and geranylgeranylation are likely required for the proper function of these small G proteins, we hypothesized that inhibition of these prenylation events would alter the growth and cellular morphogenesis of this fungus. We cloned the RAM1 gene encoding the single protein-farnesyltransferase beta-chain homologue in C. neoformans. Using a gene-disruption strategy in a diploid C. neoformans strain, we demonstrated that this gene encodes an essential function, in contrast to the case in Saccharomyces cerevisiae, in which the homologous RAM1 gene is not essential for growth. Pharmacological inhibition of farnesyltransferase activity resulted in dose-dependent cytostasis of C. neoformans, as well as prevention of hyphal differentiation. Simultaneous inhibition of farnesylation and calcineurin signalling results in a synthetic effect on growth. Protein farnesylation is required for the growth and cellular differentiation of C. neoformans and may provide novel targets for antifungal therapy.