Alcohol acetyltransferases (AATs) are a group of enzymes that catalyze the formation of esters from different alcohols and acetyl-CoA. However, these enzymes are not well characterized with regard to synthesis of antifungal compounds. The present study aims to investigate the AAT enzyme from Geotrichum candidum PF005, an endophytic yeast-like fungus that emits fruity scented antifungal volatiles, primarily comprising of acetate esters. After PCR-based cloning of the GcAAT gene, the encoded enzyme was characterized structurally through in silico methods and functionally via heterologous expression in Saccharomyces cerevisiae. In native host, the single copy GcAAT gene exhibited induced expression upon supplementation with metabolic precursors, like L-leucine (Leu) or α-ketoisocaproate (α-KIC). Docking studies using the modelled structure of GcAAT revealed differential but favourable binding interactions for three alcohol substrates (i.e., isoamyl alcohol, isobutyl alcohol and 2-phenylethanol) and the co-substrate acetyl-CoA. Binding sites for both substrate and co-substrate are found to be located inside a tunnel identified in the structure, wherein the H208 of the acetyltransferase conserved motif HXXXD was found at a hydrogen bond distance from the substrate. Functional complementation of GcAAT in S. cerevisiae AAT knockout strain caused 32% decrease in dry biomass weight of the test phytopathogenic fungus, Rhizoctonia solani as compared to the control (AAT knockout strain with empty plasmid) after 72 h of incubation due to the emitted volatiles. When the transformed yeast cells were fed with Leu and α-KIC, the relative abundance of the isoamyl acetate ester increased by 21% and 48%, respectively as compared to the control (without precursor). Further analysis documented that volatiles from α-KIC fed GcAAT transformant exhibited 58% higher antifungal activity against the test fungus R. solani than the control, engendered by increased oxidative stress that led to distorted mycelial morphology and increased hyphal branching. Together, the augmented antifungal effect displayed by the GcAAT expressing S. cerevisiae AAT knockout strain is clearly attributable to the acetate esters, especially isoamyl acetate, which are inherently produced in endophytic G. candidum PF005 as antifungal volatiles.