Fungal contamination of food, especially by mycotoxigenic fungi, not only reduces the quality of the food, but can also cause serious diseases, thus posing a major food safety challenge to humans. Apart from sound food control systems, there is also a continual need to explore antifungal agents that can inhibit fungal growth and mycotoxin production in food. Many types of fatty acids (FAs) and their oxidized derivatives, oxylipins, have been found to exhibit such effects. In this review, we provide an update on the most recent literature on the occurrence and formation of FAs and oxylipins in food, their effects on fungal growth and mycotoxin synthesis, as well as the genetic and molecular mechanisms of actions. Research gaps in the field and needs for further studies in order to realizing the potential of FAs and oxylipins as natural antifungal preservatives in food are also discussed.