The antifungal antibiotic natamycin belongs to the family of polyene antibiotics. Its antifungal activity arises via a specific interaction with ergosterol in the plasma membrane (te Welscher et al., J. Biol. Chem. 283:6393-6401, 2008). However, this activity does not involve disruption of the membrane barrier function, a well-known property of other members of the polyene antibiotic family, such as filipin and nystatin. Here we tested the effect of natamycin on vacuole membrane fusion, which is known to be ergosterol dependent. Natamycin blocked the fusion of isolated vacuoles without compromising the barrier function of the vacuolar membrane. Sublethal doses of natamycin perturbed the cellular vacuole morphology, causing the formation of many more small vacuolar structures in yeast cells. Using vacuoles isolated from yeast strains deficient in the ergosterol biosynthesis pathway, we showed that the inhibitory activity of natamycin was dependent on the presence of specific chemical features in the structure of ergosterol that allow the binding of natamycin. We found that natamycin inhibited the priming stage of vacuole fusion. Similar results were obtained with nystatin. These results suggest a novel mode of action of natamycin and perhaps all polyene antibiotics, which involves the impairment of membrane fusion via perturbation of ergosterol-dependent priming reactions that precede membrane fusion, and they may point to an effect of natamycin on ergosterol-dependent protein function in general.