Evolution has produced vast morphological and behavioral diversity amongst insects, including very successful adaptations to a diverse range of ecological niches spanning the invasion of the sky by flying insects, the crawling lifestyle on (or below) the earth, and the (semi-)aquatic life on (or below) the water surface. Developing the ability to extract a maximal amount of useful information from their environment was crucial for ensuring the survival of many insect species. Navigating insects rely heavily on a combination of different visual and non-visual cues to reliably orient under a wide spectrum of environmental conditions while avoiding predators. The pattern of linearly polarized skylight that results from scattering of sunlight in the atmosphere is one important navigational cue that many insects can detect. Here we summarize progress made toward understanding how different insect species sense polarized light. First, we present behavioral studies with “true” insect navigators (central-place foragers, like honeybees or desert ants), as well as insects that rely on polarized light to improve more “basic” orientation skills (like dung beetles). Second, we provide an overview over the anatomical basis of the polarized light detection system that these insects use, as well as the underlying neural circuitry. Third, we emphasize the importance of physiological studies (electrophysiology, as well as genetically encoded activity indicators, in Drosophila) for understanding both the structure and function of polarized light circuitry in the insect brain. We also discuss the importance of an alternative source of polarized light that can be detected by many insects: linearly polarized light reflected off shiny surfaces like water represents an important environmental factor, yet the anatomy and physiology of underlying circuits remain incompletely understood.