Background: Phaffia rhodozyma has many desirable properties for astaxanthin production, including rapid heterotrophic metabolism and high cell densities in fermenter culture. The low optimal temperature range (17-21 °C) for cell growth and astaxanthin synthesis in this species presents an obstacle to efficient industrial-scale astaxanthin production. The inhibition mechanism of cell growth at > 21 °C in P. rhodozyma have not been investigated.Results: MK19, a mutant P. rhodozyma strain grows well at moderate temperatures, its cell growth was also inhibited at 28 °C, but such inhibition was mitigated, and low biomass 6 g/L was obtained after 100 h culture. Transcriptome analysis indicated that low biomass at 28 °C resulted from strong suppression of DNA and RNA synthesis in MK19. Growth inhibition at 28 °C was due to cell membrane damage with a characteristic of low mRNA content of fatty acid (f.a.) pathway genes (acc, fas1, fas2), and consequent low f.a. content. Thinning of cell wall and low mannose content (leading to loss of cell wall integrity) also contributed to reduced cell growth at 28 °C in MK19. Levels of astaxanthin and ergosterol, two end-products of isoprenoid biosynthesis (a shunt pathway of f.a. biosynthesis), reached 2000 μg/g and 7500 μg/g respectively; ~2-fold higher than levels at 21 or 25 °C. Abundance of ergosterol, an important cell membrane component, compensated for lack of f.a., making possible the biomass production of 6 g/L for MK19 at 28 °C. Conclusion: Inhibition of growth of P. rhodozyma at 28 °C results from blocking of DNA, RNA, f.a., and cell wall biosynthesis. In MK19, abundant ergosterol made possible biomass production 6 g/L at 28 °C. Significant accumulation of astaxanthin and ergosterol indicated a active MVA pathway in MK19 at 28 °C. Strengthening of the MVA pathway can be a feasible metabolic engineering approach for enhancement of astaxanthin synthesis in P. rhodozyma. The present findings provide useful mechanistic insights regarding adaptation of P. rhodozyma to 28 °C, and improved understanding of feasible metabolic engineering techniques for industrial scale astaxanthin production by this economically important yeast species.