Recent evidence indicates that antimicrobial peptides can kill microbes in more complex ways than just by membrane permeabilization. In this study, the mechanism of internalization of the de novo designed cationic hexapeptide PAF26 has been characterized in detail using Neurospora crassa. Live-cell imaging of fluorescently labelled PAF26, organelle probes and mutants indicate that the peptide is endocytically internalized at low fungicidal concentrations (2.0–5 µM). At these concentrations, PAF26 initially accumulated in vacuoles that expanded, and then was actively transported into the cytoplasm, which coincided with cell death. Deletion mutants of the endocytic proteins RVS-161, RVS-167 and RAB-5 exhibited reduced rates of PAF26 internalization and fungicidal activity. Pharmacological experiments with live-cell probes showed that PAF26 internalization and antifungal action at low fungicidal concentrations was energy-dependent, primarily actin-mediated, and disrupted intracellular calcium homeostasis. PAF26 antifungal activity at low concentrations was shown to rely on its endocytic internalization. PAF26 also induced plasma membrane depolarization which, however, was independent of peptide internalization and killing of fungal cells. At high fungicidal concentrations (20 µM), PAF26 internalization was energy-independent, suggesting the involvement of passive peptide translocation. Our results provide new mechanistic insights into the mode-of-action of small cationic antimicrobial peptides that should facilitate improvements in their design.