Terbinafine (Lamisil) has primarily fungicidal action against many fungi as a result of its specific mechanism of squalene epoxidase inhibition. Treated fungi accumulate squalene while becoming deficient in ergosterol, an essential component of fungal cell membranes. The cidal action is closely associated with the development of high intracellular squalene concentrations, which are believed to interfere with fungal membrane function and cell wall synthesis. In the case of Candida albicans, growth inhibition with terbinafine appears to result from the ergosterol deficiency. The filamentous form of this fungus is more susceptible than the yeast form. Measurement of ergosterol biosynthesis by incorporation of radiolabelled precursors indicates a correlation between inhibition of growth and ergosterol biosynthesis in a range of pathogenic fungi. Terbinafine is a potent non-competitive inhibitor of squalene epoxidase from Candida (Ki = 30 nM). In contrast, inhibition of rat liver squalene epoxidase only occurs at higher drug concentrations (Ki = 77 microM), and is competitive with squalene. Thus, terbinafine has no effect on cholesterol biosynthesis in vivo. Squalene epoxidase is not an enzyme of the cytochrome P-450 type, thereby avoiding potential inhibition of this class of enzymes.