The antibiotic, papulacandin B, inhibited growth or (1----3)-beta-D-glucan synthetase (or both) in the fungi Saccharomyces cerevisiae, Hansenula anomala, Neurospora crassa, Cryptococcus laurentii, Schizophyllum commune and Wangiella dermatitidis. No effect was observed on Achlya ambisexualis. There was no apparent correlation between the inhibition of growth and that of the synthetase. With most of the fungal extracts, the inhibition of glucan synthetase by papulacandin B became less pronounced as the substrate (UDP-glucose) concentration was decreased. At very low levels of UDP-glucose, with the enzymes from S. cerevisiae and W. dermatitidis, the antibiotic stimulated the activity of glucan synthetase. As further studied with the W. dermatitidis enzyme, those low concentrations of UDP-glucose corresponded to a sigmoidal portion of the rate vs. substrate curve. The sigmoid segment of the curve extended to higher concentrations of UDP-glucose as the temperature was increased. Concomitantly, the range of substrate concentrations at which papulacandin B stimulated the reaction or was noninhibitory was broadened. It is tentatively concluded that glucan synthetase may exist in more than one interconvertible form. The stimulatory effect of papulacandin B is possibly due to preferential binding to the active form of the enzyme. The equilibrium between these forms could be shifted by structural changes in the membrane in which the enzyme is embedded. The lack of correlation between the effects of papulacandin B in whole cells and in extracts is discussed in terms of the variations in membrane structure in the two situations.