This review summarizes knowledge on various aspects of paracoccidioidomycosis. Mycelial propagules, chlamydospores, and arthroconidia exhibit thermal dimorphism; arthroconidia are infectious in animals and, by electron microscopy, appear well provided for survival. The mycelial-to-yeast-phase transformation requires a strict control of glucan synthesis probably mediated by membrane enzymes. Hormonal influences on the transformation of the fungus (mycelium or conidium to yeast phase) have been demonstrated. Estrogen-binding proteins have been detected in the fungal cytosol, and during the transformation novel proteins are produced as a result of estradiol incorporation. Clinical forms have been better defined on the basis of better experimental models. Emphasis has been placed on the lungs as the portal of entry and on the existence of silent pulmonary infections. A specific Paracoccidioides brasiliensis antigen, the 43-kDa glycoprotein (Gp43), has been identified, characterized, and cloned. This has led to improved reproducibility and specificity of serologic tests. The depression of cell-mediated immune responses has been associated with severe disease in humans and in the experimental host. T-cell subsets in patients' tissues were characterized by means of monoclonal antibodies, and a reduced CD4/CD8 ratio was demonstrated. This has been related to alterations in lymphokine and tumor necrosis factor production, production of antigen-antibody complexes, etc. Amphotericin B has provided effective therapy. Azole derivatives have also improved prognosis and facilitated therapy. Itraconazole is presently the drug of choice, yet incapacitating sequelae (mainly pulmonary fibrosis) still constitute major problems.