Fungi are among the most primitive organisms that synthesize sterols. The fungal sterol, ergosterol, is similar to animal sterol, cholesterol, but with significant structural differences. The genetics and biochemistry for most of the steps in sterol biosynthesis have been studied in the yeast, Saccharomyces cerevisiae. Yet, little is known of the precise physiological roles that sterols play in the cell. Work with strains that are auxotrophic for ergosterol has led to the prediction of at least four growth-dependent functions for sterols. Most of the antifungal compounds in medical and agricultural use affect some aspect of sterol synthesis or function. Extensive studies on the modes of action of those substances and research on the effects of altering sterol metabolism by sterol mutants are providing new insights into sterol functions in the cells. In addition, questioning why fungi require ergosterol rather than the simpler cholesterol provides heuristic impetus for further experimentation.