Background: Thirty-six entomopathogenic fungi (EPF) were isolated from soil and insect cadaver samples, collected from different forest types, viz., wet evergreen, moist deciduous, dry deciduous and scrub type in South India. Partial sequences of two parsimony informative genes ITS and RPB1 were determined under a phylogenetic approach for assessing the genetic diversity. Results: Twenty-seven RPB1 gene sequences and 34 sequences of ITS1, 5.8S and ITS2 regions belonging to 36 EPF were analysed for identification and characterization. Four species of Metarhizium viz., M. anisopliae, M. roberstii, M. majus and M. guizhouense were differentiated. The isolates could be grouped into four main clades of 1–5. Most of the fungi appeared to be closely related to M. anisopliae. Based on the colony characters, colour, conidial size and shape, 27 isolates were morphologically identified as M. anisopliae. Seven strains were apparently related to M. robertsii, three isolates were similar to M. majus and the remaining one was identified as M. guizhouense. Morphological studies in congruence with phylogenetic analysis resolved the species diversity. Bioassay studies showed that M. quizhouense, M. majus and M. robertsii were effective against the banana stem weevil Odoiporus longicollis. Conclusions: This is the first attempt to study the diversity and occurrence of Metarhizium species in forests of South India. Wet evergreen forest of Aralam in South India was rich in EPF diversity particularly for three species namely, M. quizhouense, M. robertsii and M. anisopliae.