Metarhizium anisopliae conidia (spores) reduced weight gain and caused death when injected into Manduca sexta larvae. When the fungus was co-injected with the eicosanoid biosynthesis inhibitor dexamethasone, larval weight gain was further reduced and mortality increased. These effects were reversed when dexamethasone was given together with the eicosanoid precursor arachidonic acid (AA). Similarly, treatment with other eicosanoid biosynthesis inhibitors (esculetin, phenidone, ibuprofen, and indomethacin) with differing modes of action enhanced the reduction in weight gain caused by mycosis. Injection of M. anisopliae conidia induced nodule formation in vivo; nodule numbers were reduced by dexamethasone, and restored by AA. Incubation of hemocytes with conidia caused microaggregation of hemocytes (indicative of nodule formation) in vitro and this was inhibited by dexamethasone, suggesting that dexamethasone acts directly on hemocytes, although inhibition was only partially reversed by AA. We suggest that the M. sexta immune response to fungal pathogens is normally modulated by physiological systems that include eicosanoid biosynthesis. This is the first demonstration that the virulence of a fungal entomopathogen can be enhanced by compromising the insect host's immune system.