This article covers the literature on fungal type III polyketide synthases (PKSs) published from 2005 to 2014. Since the first discovery of fungal type III PKS genes in Aspergillus oryzae, reported in 2005, putative genes for type III PKSs have been discovered in fungal genomes. Compared with type I PKSs, type III PKSs are much less abundant in fungi. However, type III PKSs could have some critical roles in fungi. This article summarizes the studies on fungal type III PKS functional analysis, including Neurospora crassa ORAS, Aspergillus niger AnPKS, Botrytis cinerea BPKS and Aspergillus oryzae CsyA and CsyB. It is mostly in vitro analysis using their recombinant enzymes that has revealed their starter and product specificities. Of these, CsyB was found to be a new kind of type III PKS that catalyses the coupling of two β-keto fatty acyl CoAs. Homology modelling reported in this article supports the importance of the capacity of the acyl binding tunnel and active site cavity in fungal type III PKSs.