Hassallidins are cyclic glycolipopeptides produced by cyanobacteria and other prokaryotes. The hassallidin structure consists of a peptide ring of eight amino acids where a fatty acid chain, additional amino acids, and sugar moieties are attached. Hassallidins show antifungal activity against several opportunistic human pathogenic fungi, but does not harbor antibacterial effects. However, they have not been studied on mammalian cells, and the mechanism of action is unknown. We purified hassallidin D from cultured cyanobacterium Anabaena sp. UHCC 0258 and characterized its effect on mammalian and fungal cells. Ultrastructural analysis showed that hassallidin D disrupts cell membranes, causing a lytic/necrotic cell death with rapid presence of disintegrated outer membrane, accompanied by internalization of small molecules such as propidium iodide into the cells. Furthermore, artificial liposomal membrane assay showed that hassallidin D selectively targets sterol-containing membranes. Finally, in silico membrane modeling allowed us to study the interaction between hassallidin D and membranes in detail, and confirm the role of cholesterol for hassallidin-insertion into the membrane. This study demonstrates the mechanism of action of the natural compound hassallidin, and gives further insight into how bioactive lipopeptide metabolites selectively target eukaryotic cell membranes. Copyright © 2019 The Author(s). Published by Elsevier B.V. All rights reserved.