Compounds belonging to the group of 5-substituted 4-(1,3,4-thiadiazol-2-yl) benzene-1,3-diols exhibit a broad spectrum of biological activity, including antibacterial, antifungal, and anticancer properties. The mechanism of the antifungal activity of compounds from this group has not been described to date. Among the large group of 5-substituted 4-(1,3,4-thiadiazol-2-yl) benzene-1,3-diol derivatives, the compound 4-(5-methyl-1,3,4-thiadiazole-2-yl) benzene-1,3-diol, abbreviated as C1, was revealed to be one of the most active agents against pathogenic fungi, simultaneously with the lowest toxicity to human cells. The C1 compound is a potent antifungal agent against different Candida species, including isolates resistant to azoles, and molds, with MIC100 values ranging from 8 to 96 μg/ml. The antifungal activity of the C1 compound involves disruption of the cell wall biogenesis, as evidenced by the inability of cells treated with C1 to maintain their characteristic cell shape, increase in size, form giant cells and flocculate. C1-treated cells were also unable to withstand internal turgor pressure causing protoplast material to leak out, exhibited reduced osmotic resistance and formed buds that were not covered with chitin. Disturbances in the chitin septum in the neck region of budding cells was observed, as well as an uneven distribution of chitin and β(1→3) glucan, and increased sensitivity to substances interacting with wall polymerization. The ATR-FTIR spectral shifts in cell walls extracted from C. albicans cells treated with the C1 compound suggested weakened interactions between the molecules of β(1→3) glucans and β(1→6) glucans, which may be the cause of impaired cell wall integrity. Significant spectral changes in the C1-treated cells were also observed in bands characteristic for chitin. The C1 compound did not affect the ergosterol content in Candida cells. Given the low cytotoxicity of the C1 compound to normal human dermal fibroblasts (NHDF), it is possible to use this compound as a therapeutic agent in the treatment of surface and gastrointestinal tract mycoses.