The biogenic amine octopamine is widely distributed within the nervous system of invertebrates. This review examines the role of octopamine in insects and shows that octopamine can act as a neurotransmitter, a neurohormone, and a neuromodulator. Examples of its neurotransmitter role are found in the firefly lantern and also possibly in the glandular lobe of the corpora cardiaca of locusts. Octopamine is also present in the haemolymph of cockroaches and locusts where it functions as a neurohormone, controlling the release of trehalose and lipid from fat body. In locusts, an identified octopaminergic neuron innervates the extensor-tibiae muscle of the hind legs. This neuron inhibits a myogenic rhythm of contraction and relaxation found in a proximal bundle of muscle fibers, and modulates the activity expressed by motoneurons which innervate the extensor-tibiae muscle. Octopamine is, therefore, a neuromodulator in this system. The functional significance of octopamine in insects is discussed with special reference to its association with general arousal phenomena.