Aflatoxins are the most thoroughly studied mycotoxins. Elegant early research on the biosynthetic scheme of the pathway has allowed a molecular characterization of aflatoxin biosynthesis and its regulation. Genetic studies on aflatoxin biosynthesis in Aspergillus flavus and A. parasiticus, and sterigmatocystin biosynthesis in A. nidulans, led to the cloning of 17 genes responsible for 12 enzymatic conversions in the AF/ST pathways. Pathway-specific regulation is by a Zn(II)2Cys6 DNA-binding protein that regulates the transcription of all pathway genes. Less is known about the global factors that regulate aflatoxin biosynthesis, but there is a clear link between development and aflatoxin biosynthesis. There is also a large body of information on physiological factors involved in aflatoxin biosynthesis, but it has been difficult to understand their role in the regulation of this pathway. This chapter discusses current knowledge on the molecular biology and genetics of the pathway, and provides a summary of the physiological factors known to influence aflatoxin formation.