Clotrimazole inhibits the synthesis of ergosterol, an essential component of fungal cell membranes. By inhibiting the enzyme 24-methylenhydroanosterol, the cell is unable to build up desmethylsterol out of lanosterol, and therefore also unable to build up ergosterol. When this important building block is missing, the cell membrane is damaged, cell contents leak and thus lead to the

destruction of the fungus. As they are all dependent on ergosterol, clotrimazole thus has a perfect point of attack with all fungi that are able to cause skin infections in humans.

Clotrimazole's mode of action depends on the level of concentration. At low concentration it is fungistatic. Fungal growth is inhibited and fungi are thus unable to spread further. At higher concentrations ranging from 10-20 mg/l, as are applied for local treatment of the epidermis, it even has a fungicidal effect leading to a direct destruction of fungi.

Furthermore, clotrimazole is said to reduce the risk of infestation of the host tissue with yeast cells, which would, at a later point in time, multiply there. Clotrimazole may also stimulate the immune system, which would be supportive of treatment.