This review examines the symbiotic, evolutionary, proteomic and genetic basis for a group of fungi that occupy a specialized niche as insect pathogens as well as endophytes. We focus primarily on species in the genera Metarhizium and Beauveria, traditionally recognized as insect pathogenic fungi but are also found as plant symbionts. Phylogenetic evidence suggests that these fungi are more closely related to grass endophytes and diverged from that lineage ca. 100 MYA. We explore how the dual life cycles of these fungi as insect pathogens and endophytes are coupled. We discuss the evolution of insect pathogenesis while maintaining an endophytic lifestyle and provide examples of genes that may be involved in the transition toward insect pathogenicity. That is, some genes for insect pathogenesis may have been co-opted from genes involved in endophytic colonization. Other genes may be multifunctional and serve in both lifestyle capacities. We suggest that their evolution as insect pathogens allowed them to effectively barter a specialized nitrogen source (i.e. insects) with host plants for photosynthate. These ubiquitous fungi may play an important role as plant growth promoters and have a potential reservoir of secondary metabolites.