The genus Monascus, comprising nine species, can reproduce either vegetatively with filaments and conidia or sexually by the formation of ascospores. The most well-known species of genus Monascus, namely, M. purpureus, M. ruber and M. pilosus, are often used for rice fermentation to produce red yeast rice, a special product used either for food coloring or as a food supplement with positive effects on human health. The colored appearance (red, orange or yellow) of Monascus-fermented substrates is produced by a mixture of oligoketide pigments that are synthesized by a combination of polyketide and fatty acid synthases. The major pigments consist of pairs of yellow (ankaflavin and monascin), orange (rubropunctatin and monascorubrin) and red (rubropunctamine and monascorubramine) compounds; however, more than 20 other colored products have recently been isolated from fermented rice or culture media. In addition to pigments, a group of monacolin substances and the mycotoxin citrinin can be produced by Monascus. Various non-specific biological activities (antimicrobial, antitumor, immunomodulative and others) of these pigmented compounds are, at least partly, ascribed to their reaction with amino group-containing compounds, i.e. amino acids, proteins or nucleic acids. Monacolins, in the form of β-hydroxy acids, inhibit hydroxymethylglutaryl-coenzyme A reductase, a key enzyme in cholesterol biosynthesis in animals and humans.