Mycobiota fatty acid synthases (FASs) catalyze iterative cycles of condensation, dehydration, and reduction to produce saturated fatty acids. Although these multienzymes are attractive antifungal drug targets, no clinically approved small-molecule inhibitors exist, and the regulation of de novo fatty acid synthesis remains poorly understood. Here, we identify an allosteric regulation of the FAS ketoacyl reduction reaction by palmitoyl-CoA. The palmitate moiety binds a distal site on the central wheel of fungal FAS from Saccharomyces cerevisiae and Candida albicans. This site also accommodates shorter acyl chains, but only palmitoyl-CoA suppresses ketoacyl reductase (KR) activity. While no major conformational changes occur in the reductase domain, palmitoyl-CoA binding quenches dynamics in the central disk, improving local resolution and stabilizing structured water molecules. This entropic effect underlies allosteric communication to the reductase site. Our findings uncover a regulatory mechanism of fungal FAS exploitable for antifungal drug design.