Many insects survive internal ice formation. The general model of freeze tolerance is of extracellular ice formation (EIF) whereby ice formation in the haemocoel leads to osmotic dehydration of the cells, whose contents remain unfrozen. However, survivable intracellular ice formation (IIF) has been reported in fat body and certain other cells of some insects. Although the cellular location of ice has been determined only in vitro, several lines of evidence suggest that IIF occurs in vivo. Both cell-to-cell propagation of intracellular ice and inoculation from the haemocoel may be important, although the route of ice into the cell is unclear. It is unclear why some cells survive IIF and others do not, but it is suggested that the shape, size, and low water content of fat body cells may predispose them towards surviving ice formation. We speculate that IIF may reduce water loss in some freeze tolerant species, but there are too few data to build a strong conceptual model of the advantages of IIF. We suggest that new developments in microscopy and other forms of imaging may allow investigation of the cellular location of ice in freeze tolerant insects in vivo.