ABSTRACTFlocculosin and ustilagic acid (UA), two highly similar antifungal cellobiose lipids, are respectively produced byPseudozyma flocculosa, a biocontrol agent, andUstilago maydis, a plant pathogen. Both glycolipids contain a short-chain fatty acid hydroxylated at the β position but differ in the long fatty acid, which is hydroxylated at the α position in UA and at the β position in flocculosin. In both organisms, the biosynthesis genes are arranged in large clusters. The functions of most genes have already been characterized, but those of theP. flocculosa fhd1gene and its homolog fromU. maydis,uhd1, have remained undefined. The deduced amino acid sequences of these genes show homology to those of short-chain dehydrogenases and reductases (SDR). We disrupted theuhd1gene inU. maydisand analyzed the secreted UA.uhd1deletion strains produced UA lacking the β-hydroxyl group of the short-chain fatty acid. To analyze the function ofP. flocculosaFhd1, the corresponding gene was used to complementU. maydisΔuhd1mutants. Fhd1 was able to restore wild-type UA production, indicating that Fhd1 is responsible for β hydroxylation of the flocculosin short-chain fatty acid. We also investigated aP. flocculosahomolog of theU. maydislong-chain fatty-acid alpha hydroxylase Ahd1. TheP. flocculosa ahd1gene, which does not reside in the flocculosin gene cluster, was introduced intoU. maydisΔahd1mutant strains.P. flocculosaAhd1 neither complemented theU. maydisΔahd1phenotype nor resulted in the production of β-hydroxylated UA. This suggests thatP. flocculosaAhd1 is not involved in flocculosin hydroxylation.