There is a significant need for developing compounds that kill Cryptococcus neoformans, the fungal pathogen that causes meningoencephalitis in immunocompromised individuals. Here, we report the mode of action of a designed antifungal peptide, VG16KRKP (VARGWKRKCPLFGKGG) against C. neoformans. It is shown that VG16KRKP kills fungal cells mainly through membrane compromise leading to efflux of ions and cell metabolites. Intracellular localization, inhibition of in vitro transcription, and DNA binding suggest a secondary mode of action for the peptide, hinting at possible intracellular targets. Atomistic structure of the peptide determined by NMR experiments on live C. neoformans cells reveals an amphipathic arrangement stabilized by hydrophobic interactions among A2, W5, and F12, a conventional folding pattern also known to play a major role in peptide-mediated Gram-negative bacterial killing, revealing the importance of this motif. These structural details in the context of live cell provide valuable insights into the design of potent peptides for effective treatment of human and plant fungal infections.