Although pneumonia caused by fungi is not a common occurrence in the general population, disease in an enlarging immunocompromised population is encountered with increasing frequency. Fungal pneumonias are most frequently caused by Aspergillus spp., dimorphic fungi and Cryptococcus neoformans. Recent studies have identified risk factors of thrombocytopenia, environmental events (such as construction or renovation) and immunosuppressive drug therapies as being specific risk factors for invasive fungal disease in select patient populations. Diagnostic strategies to detect circulating antigens and polymerase chain reaction based detection systems have been explored to improve identification prior to the progressive advanced disease. Advances in prophylactic strategies include increased use of aerosolized formulations of amphotericin B, usually in conjunction with new and old systemic antifungal agents. Despite recent published guidelines for treatment of fungal pneumonia based on etiology, mortality remains high in some infections with advanced disease. Caspofungin, a new echinocandin antifungal, has recently been approved by the US Food and Drug Administration for the treatment of invasive Aspergillus infections in patients unresponsive to or unable to receive amphotericin B. A triazole antifungal, voriconazole, has shown promise in phase III clinical trials in patients with refractory fungal infections and is expected to be available in early 2002. Other echinocandin and triazole antifungals are under development in attempts to provide improved effective therapy for fungal pneumonia.