Ascoviruses (AVs) are obligate intracellular pathogens that target the larval and pupal stages of lepidopteran insects, specifically moth caterpillars. AVs are unique among viruses in their (i) transmission mode, (ii) gross pathology, (iii) virion ultrastructure, (iv) genomic architecture featuring a remarkable combination of genes, and (v) ability to reprogram host cell death and lipid biosynthetic pathways to generate virion-containing vesicles (VCVs). The metabolically active acellular VCVs are repurposed to complete virogenesis and to facilitate dissemination by endoparasitoid wasps. Since their discovery in the late 20th century, research has focused on these distinctive traits and, to a lesser extent, their potential for biological control. Among AV proteins are the large DNA-binding P64 family, inhibitor of apoptosis-like proteins (IAPs), executioner caspase and caspase-like proteins, and lipid-modifying enzymes, which together drive their novel cytopathology. This review synthesizes current knowledge of AV biology and proposes a framework for understanding VCV formation by integrating predicted viral protein functions with host cellular pathways, including the ceramide–sphingosine-1-phosphate rheostat and apoptosis.