The role and fate of lichen compounds in interactions of lichens with polyphagous and oligophagous herbivores including insects and snails was studied. Several frequently occurring lichen products such as usnic acids or vul- pinic acid are highly toxic and deterrent towards polyphagous pest insects like larvae of the noctuid Spodoptera littoralis that are not adapted to feed on lichens. Members of the lepidopteran family Arctiidae, however, which feed on lichens in nature do not only tolerate dietary lichen compounds but even sequester them from their hosts. Lichen compounds are also found in several species of terrestrial snails (including Balea perversa and Helicigona lapicida) that are among the major lichen feeders on the Baltic island of Öland. Sequestration of lichen compounds by the snails occurs apparently not at random but appears to be rather specific as only some of the dietary lichen compounds (e.g. the an- thraquinone parietin) incorporated by the snails are stored in their soft bodies whereas other compounds (e.g. usnic acids) are excreted via the feces. The ovo- viviparous snail Balea perversa accumulates sequestered parietin in its reproductive system and passes the anthraquinone on to its offspring. Laboratory feeding experiments with H. lapicida snails indicate that lichen compounds which are deterrent towards larvae of the polyphagous herbivore S. littoralis act rather as phagostimulants than as deterrents for the snails which are adapted to feed on lichens. It is suggested that stored lichen compounds are involved in the chemical defense of specialized lichen feeding snails and insects