Yahoo's biggest adversary just showed Marissa Mayer its nuclear option.
Making good on its threats, hedge fund Starboard Value called for the removal of Yahoo's entire nine-member board on Thursday.
The move is a significant escalation in an 18-month-long battle that could lead to Mayer's ouster as CEO or the eventual sale of Yahoo.
Starboard said it will nominate an alternate slate of directors to the board at Yahoo's shareholder meeting set for later this spring. Starboard told Yahoo earlier in the year that it would take that action if Yahoo didn't take more aggressive steps to boost the company's stock price.
"We have been extremely disappointed with Yahoo's dismal financial performance, poor management execution, egregious compensation and hiring practices, and general lack of accountability and oversight by the board," the hedge fund said in a letter to shareholders.
Starboard said it believes the current board "lacks the leadership, objectivity, and perspective needed to make decisions that are in the best interests of shareholders."
The hedge fund's letter to Yahoo (YHOO) was first reported by The Wall Street Journal.
Yahoo's board issued a statement, saying it is reviewing Starboard's proposal, and it will respond "in due course."
Related: Will Marissa Mayer be Yahoo's last CEO?
In January, Starboard managing member Jeff Smith called for "significant changes across all aspects of the business starting at the board level, and including executive leadership."
Starboard owns nearly 2% of Yahoo. Its stake is worth $570 million.
In an effort to stave off Starboard's aggressive tactics, Yahoo in February laid the groundwork for a revitalization. It laid off 15% of its workforce, eliminated products that weren't working, returned focus to its core products and media brands and promised to save $400 million. It also promised to sell off assets to bring in an additional $1 billion.
Yahoo promised to return itself to "modest to accelerating growth" next year and in 2018. And the board has even said it is entertaining a sale.
But Yahoo knew Starboard's move to blow up the company's board was still a looming option, so Yahoo has been girding for a fight.
Marissa Mayer has gone on the public offensive. She appeared on CNBC several times over the past few weeks and was interviewed by Charlie Rose earlier this month in a defense of her leadership.
The Charlie Rose interview came just hours after Yahoo appointed two new directors to its board, a move that could buttress the company against Starboard.
Yahoo's shares have risen 12% over the past month, though it followed the broader market's recent surge.
The hedge fund isn't impressed. It has said that Mayer and her team have made no progress over the past three and a half years in their attempt to turn around Yahoo's fortunes.
Starboard has previously succeeded in replacing a target's entire board, a rare feat for an activist investor. In 2014, the hedge fund ousted the board of Olive Garden parent Darden Restaurants as part of a dramatic proxy fight.
