Fungi belonging to Pseudozyma spp. represent a small group of yeasts that have drawn limited interest in the scientific literature. However, new research with one species of Pseudozyma, Pseudozyma flocculosa, has demonstrated the potential of this yeast as a biocontrol agent of plant-pathogenic fungi. Based on recent work, it appears that P. flocculosa, a natural inhabitant of the phyllosphere, possesses unique means of defending its ecological niche by producing unusual extracellular fatty acids that are detrimental to, among other fungi, powdery mildews, an important group of plant pathogens. Results from these studies have shown that the fatty acids naturally insert themselves into powdery mildew fungi and cause disorganization of cellular membranes and cell disintegration. Further work with insertional mutagenesis yielded mutants of P. flocculosa that represent valuable biological tools to better understand the properties of the yeast. For instance, preliminary work with mutants having lost their antagonistic properties has led to the isolation of a new metabolite with antifungal activity. Discoveries pertaining to the ecology and mode of action of P. flocculosa may lead to the study of unique metabolic or biological processes in other Pseudozyma spp. that could well release the untapped potential of these misunderstood yeasts.