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The filamentous fungus Mortierella alpina 1S-4 is capable of accumulating a large amount of triacylglycerol containing C20 polyunsaturated fatty acids (PUFAs). Indeed, triacylglycerol production by M. alpina 1S-4 can reach 20 g/L of culture broth, and the critical cellular signaling and structural PUFA arachidonic acid (ARA) comprises 30%–70% of the total fatty acid. The demonstrated health benefits of functional PUFAs have in turn encouraged the search for rich sources of these compounds, including fungal strains showing enhanced production of specific PUFAs. Screening for mutants and targeted gene manipulation of M. alpina 1S-4 have elucidated the functions of various enzymes involved in PUFA biosynthesis and established lines with improved PUFA productivity. In some cases, these strains have been used for indistrial-scale production of PUFAs, including ARA. In this review, we described practical ARA production through mutant breeding, functional analyses of genes encoding enzymes involved in PUFA biosynthesis, and recent advances in the production of specific PUFAs through molecular breeding of M. alpina 1S-4.