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Natural products play an essential role in our everyday life as almost all antibiotics or anti-cancer compounds currently in clinical use are either natural products or derivatives thereof. Mainly due to increasing resistance against these antibiotics there is an urgent need for novel bioactive natural products and several strategies are currently in use to find new compounds. In this chapter insects are suggested as a new and very promising source for novel secondary metabolite-producing bacteria and fungi. Whereas entomopathogenic fungi have been known for quite some time as potent producers of different bioactive compounds and have been used in traditional Chinese medicine for more than 2000 years, almost nothing is known about the underlying biochemistry and molecular biology that is involved in the biosynthesis of such compounds. Similarly, entomopathogenic bacteria have only been proven to be a rich source of interesting compounds during the last 20 years and recent genome sequencing projects have revealed their great potential as secondary metabolite producers. Furthermore, bacteria that live in symbiosis with insects have also been shown to be a rich source of potent natural products which have to be explored in the future in more detail. [ABSTRACT FROM AUTHOR]