Selenium (Se) plays a critical role in diverse biological processes and is widely used across manufacturing industries. However, the contamination of Se oxyanions also poses a major public health concern. Microbial transformation is a promising approach to detoxify Se oxyanions and produce elemental selenium nanoparticles (SeNPs) with versatile industrial potential. Yeast-like fungi are an important group of environmental microorganisms, but their mechanisms for Se oxyanions reduction remain unknown. In this study, we found that Aureobasidium melanogenum I15 can reduce 1.0 mM selenite by over 90% within 48 h and efficiently form intracellular or extracellular spherical SeNPs. Metabolomic and proteomic analyses disclosed that A. melanogenum I15 evolves a complicated selenite reduction mechanism involving multiple metabolic pathways, including the glutathione/glutathione reductase pathway, the thioredoxin/thioredoxin reductase pathway, the siderophore-mediated pathway, and multiple oxidoreductase-mediated pathways. This study provides the first report on the mechanism of selenite reduction and SeNPs biogenesis in yeast-like fungi and paves an alternative avenue for the bioremediation of selenite contamination and the production of functional organic selenium compounds. Display omitted •melanogenum I15 can reduce over 90% of 1 mM selenite within 48 h.•Selenite reduction occurs both intracellularly and extracellularly in I15.•Selenite reduction occurs through multiple oxidoreductase-mediated pathways in I15.•Selenite stress alters the cell morphology and the cell membrane structure of I15.•Glutathione and siderophores were actively involved in the selenite reduction of I15.