We investigated the distribution of Malassezia yeast in 120 Chinese (20 patients from each of six cities) and 20 Korean patients with scalp seborrheic dermatitis (SD) and dandruff (SD/D) using ITS1 and ITS2 polymerase chain reaction-restriction fragment length polymorphism. Bioactivity was studied by quantifying sebum lipid production by human primary sebocytes and inflammatory cytokine, interleukin-8 (IL-8) production was studied by exposing HaCaT keratinocytes with extracts of five standard Malassezia strains; M. globosa, M. restricta, M. sympodialis, M. dermatis and M. slooffiae. M. restricta and M. globosa were the most frequently encountered species from both Chinese and Korean patients. These two Malassezia species also promoted neutral lipid synthesis although the result was not statistically significant and induced significant increase in IL-8 production among the five Malassezia species studied. The study suggests a possible role of these organisms in the pathogenesis of SD/D.