Geraniol, an olefinic terpene, was found to inhibit growth of Candida albicans and Saccharomyces cerevisiae strains. Geraniol was shown to enhance the rate of potassium leakage out of whole cells and also was shown by fluorescence polarization to increase C. albicans membrane fluidity. Biophysical studies using differential scanning calorimetry, fluorescence polarization and osmotic swelling of phospholipid vesicles demonstrated that geraniol decreased the phase-transition temperature of dipalmitoylphosphatidylcholine vesicles, affected fluidity throughout the bilayer, particularly the central portion of the bilayers, and caused an increase in bilayer permeability to erythritol. Geraniol may have potential use as an antifungal agent.