Studies on the application of functional lipids such as polyunsaturated fatty acids (PUFAs) have proceeded in various fields regarding health and dietary requirements in a search for novel and rich sources. Filamentous fungus Mortierella alpina 1S-4 produces triacylglycerols rich in arachidonic acid, ones reaching 20 g/L and containing 30-70% arachidonic acid as to the total fatty acids. Mutants derived from M. alpina 1S-4, defective in Delta5 and Delta6 desaturases, accumulate triacylglycerols rich in unique PUFAs, i.e., dihomo-gamma-linolenic acid and Mead acid, respectively. Furthermore, various mutants derived from M. alpina 1S-4 have led to the production of oils containing n-1, n-3, n-4, n-6, n-7, and n-9 PUFAs. A variety of genes encoding fatty acid desaturases and elongases involved in PUFA biosynthesis in M. alpina 1S-4 has been isolated and characterized. Molecular breeding of M. alpina strains by means of manipulation of these genes facilitates improvement of PUFA productivity and elucidation of the functions of enzymes involved in PUFA biosynthesis.