Fusarium species are known for their abundance in nature and their diverse associations with both living and dead plants and animals. Among animals Fusarium is found primarily in relationship with insects. This literature review of the past 50 years includes both non-pathogenic and pathogenic relationships between Fusarium and insects. Special attention is given to the host range, particularly between plant- and insect-hosts, and to the possible microbial potential of the fungus to control insect pests. Correct classification of this fungus has been difficult because of its diverse and non-uniform morphological features. However, by now a usable and reliable taxonomic system has been developed. The fungus can be easily cultured and mass produced. Among the non-pathogenic associations mutualism and allotrophy are found between Fusarium and wood-inhabiting and flour beetles, respectively, enhancing development and production of beetle larvae. Some insects contribute to the dispersal of the fungus in the environment by means of spore passage through their guts. Plant-pathogenic Fusarium species gain access to host tissue by plant-feeding insects. A large number of Fusarium spp. are entomopathogenic; some are weak, facultative pathogens, especially of the lepidopteran and coleopteran orders, and they will colonize their dead hosts as saprophytes. In a few cases pathogenicity to both plant and insect by one isolate was found. Strong pathogens were reported primarily from homopterans and dipterans from field observations of natural mortalities as well as from pathogenicity tests. Potential Fusarium isolates which cause high insect mortalities also show high host specificity and no damage to crop plants. The question of host invasion has been addressed by few investigators. Entrance of the fungus via the oral route, oviposition tubes, wounds, or ectoparasitic activity, were stated, but no claim for penetration of the insect cuticle. Mycotoxins, such as trichothecenes (T-2) and other secondary metabolites, contributed to mortalities of termites, mealworms, flour beetles, maize borers and blow flies, while zearalenone (F-2) exhibited a beneficial effect on egg production in flour beetles and a detrimental effect on fecundity in mammals. Studies on adverse effects of the fungus on beneficial organisms (including mammals and plants) revealed that both harmful as well as safe Fusarium isolates exist in nature. Highly host-specific and strongly entomopathogenic Fusarium isolates should be more extensively studied and tested for their possible use in biological control.