The present invention relates to a .DELTA.5 desaturase, which has the ability to convert dihomo-.gamma.-linolenic acid (DGLA; 20:3 .omega.-6) to arachidonic acid (ARA; 20:4 .omega.-6) and/or eicosatetraenoic acid (ETA; 20:4 .omega.-3) to eicosapentaenoic acid (EPA; 20:5 .omega.-3). Isolated nucleic acid fragments and recombinant constructs comprising such fragments encoding .DELTA.5 desaturase along with a method of making long chain polyunsaturated fatty acids (PUFAs) using this .DELTA.5 desaturase in oleaginous yeast are disclosed.