The present invention relates to a fungal C.sub.16/18 fatty acid elongase
that is able to catalyze the conversion of palmitate (16:0) to stearic
acid (18:0). Specifically, the nucleotide sequence of a Mortierella
alpina C.sub.16/18 fatty acid elongase is provided (designated as
"ELO3"). Methods of increasing microbial oil production, increasing
carbon flux into the polyunsaturated fatty acid biosynthetic pathway and
increasing the content of polyunsaturated fatty acids by over-expression
of the C.sub.16/18 fatty acid elongase are described herein. Most
desirably, the substrate specificity of the instant ELO3 will be
particularly useful to enable accumulation of long-chain polyunsaturated
fatty acids in oleaginous yeast, such as Yarrowia lipolytica.