Conditions in the infected human host trigger virulence attributes of the fungal pathogenCandida albicans. Specific inducers and elevated temperatures lead to hyphal development or regulate chlamydospore development. To explore if these processes are affected by membrane lipids, an investigation of the functions of the Ole1 fatty acid desaturase (stearoyl-CoA desaturase) inC. albicans, which synthesizes oleic acid, was undertaken. A conditional strain expressingOLE1from the regulatableMET3promoter was unable to grow in repressing conditions, indicating thatOLE1is an essential gene. In contrast, a mutant lacking both alleles ofOLE2, encoding a Ole1p homologue, was viable and had no apparent phenotypes. Partial repression ofMET3p–OLE1slightly lowered oleic acid levels and decreased membrane fluidity; these conditions permitted growth in the yeast form, but prevented hyphal development in aerobic conditions and blocked the formation of chlamydospores. In contrast, in hypoxic conditions, which trigger an alternative morphogenetic pathway, hyphal morphogenesis was unaffected. Because aerobic morphogenetic signalling and oleic acid biosynthesis require oxygen, it is proposed that oleic acid may function as a sensor activating specific morphogenetic pathways in normoxic conditions.