Monomethyl branched-chain fatty acids (mmBCFAs) are commonly found in many organisms from bacteria to mammals. In humans, they have been detected in skin, brain, blood, and cancer cells. Despite a broad distribution, mmBCFAs remain exotic in eukaryotes, where their origin and physiological roles are not understood. Here we report our study of the function and regulation of mmBCFAs in Caenorhabditis elegans, combining genetics, gas chromatography, and DNA microarray analysis. We show that C. elegans synthesizes mmBCFAs de novo and utilizes the long-chain fatty acid elongation enzymes ELO-5 and ELO-6 to produce two mmBCFAs, C15ISO and C17ISO. These mmBCFAs are essential for C. elegans growth and development, as suppression of their biosynthesis results in a growth arrest at the first larval stage. The arrest is reversible and can be overcome by feeding the arrested animals with mmBCFA supplements. We show not only that the levels of C15ISO and C17ISO affect the expression of several genes, but also that the activities of some of these genes affect biosynthesis of mmBCFAs, suggesting a potential feedback regulation. One of the genes, lpd-1, encodes a homolog of a mammalian sterol regulatory element-binding protein (SREBP 1c). We present results suggesting that elo-5 and elo-6 may be transcriptional targets of LPD-1. This study exposes unexpected and crucial physiological functions of C15ISO and C17ISO in C. elegans and suggests a potentially important role for mmBCFAs in other eukaryotes.