In the present work we report for what we believe to be the first time the antifungal activity and mechanism of action of the essential oils of Lavandula viridis from Portugal. The essential oils were isolated by hydrodistillation and analysed by GC and GC/MS. The MIC and the minimal lethal concentration (MLC) of the essential oil and its major compounds were determined against several pathogenic fungi. The influence of subinhibitory concentrations of the essential oil on the dimorphic transition in Candida albicans was also studied, as well as propidium iodide and FUN-1 staining of Candida albicans cells by flow cytometry following short treatments with the essential oil. The oils were characterized by a high content of oxygen-containing monoterpenes, with 1,8-cineole being the main constituent. Monoterpene hydrocarbons were present at lower concentrations. According to the determined MIC and MLC values, the dermatophytes and Cryptococcus neoformans were the most sensitive fungi (MIC and MLC values ranging from 0.32 to 0.64 µl ml⁻¹), followed by Candida species (at 0.64-2.5 µl ml⁻¹). For most of these strains, MICs were equivalent to MLCs, indicating a fungicidal effect of the essential oil. The oil was further shown to completely inhibit filamentation in Candida albicans at concentrations well below the respective MICs (as low as MIC/16). Flow cytometry results suggested a mechanism of action ultimately leading to cytoplasmic membrane disruption and cell death. Our results show that L. viridis essential oils may be useful in the clinical treatment of fungal diseases, particularly dermatophytosis and candidosis, although clinical trials are required to evaluate the practical relevance of our in vitro research.