Microsporidia are a large group of microbial eukaryotes composed exclusively of obligate intracellular parasites of other eukaryotes. Almost 150 years of microsporidian research has led to a basic understanding of many aspects of microsporidian biology, especially their unique and highly specialized mode of infection, where the parasite enters its host through a projectile tube that is expelled at high velocity. Molecular biology and genomic studies on microsporidia have also drawn attention to many other unusual features, including a unique core carbon metabolism and genomes in the size range of bacteria. These seemingly simple parasites were once thought to be the most primitive eukaryotes; however, we now know from molecular phylogeny that they are highly specialized fungi. The fungal nature of microsporidia indicates that microsporidia have undergone severe selective reduction permeating every level of their biology: From cell structures to metabolism, and from genomics to gene structure, microsporidia are reduced.