Aflatoxins are toxic and extremely carcinogenic natural secondary metabolites produced primarily by the fungi Aspergillus flavus and Aspergillus parasiticus. The biosynthesis of aflatoxins is a complex process involving multi-enzymatic reactions. Genetic studies of the molecular mechanism of aflatoxin B1 biosynthesis have identified an aflatoxin pathway gene cluster of 70 kilobase pairs in length consisting of at least 24 identified structural genes including a positive regulatory gene as transcription activator. The structural genes encode cytochrome P450 monooxygenases, dehydrogenases, oxidases, methyltransferases, a polyketide synthase and two unique fatty acid synthases. The aflatoxin biosynthesis and its genetic regulation are discussed in this review. The current knowledge of the relationship between fungal development and secondary metabolism is also summarized.