Morphogenesis in fungi is often induced by extracellular factors and executed by fungal genetic factors. Cell surface changes and alterations of the microenvironment often accompany morphogenetic changes in fungi. In this review, we will first discuss the general traits of yeast and hyphal morphotypes and how morphogenesis affects development and adaptation by fungi to their native niches, including host niches. Then we will focus on the molecular machinery responsible for the two most fundamental growth forms, yeast and hyphae. Last, we will describe how fungi incorporate exogenous environmental and host signals together with genetic factors to determine their morphotype and how morphogenesis, in turn, shapes the fungal microenvironment.