Regulation of insect populations with discrete generations by vertically transmitted diseases with short-lived propagules is discussed through the development of a mathematical model. It is concluded that regulation of host populations by such diseases can be achieved over a wide range of conditions and that this type of disease-host interaction can lead to stable damped oscillations or limit cycles of host density. Characteristics of such pathogens leading to stability of host populations include low virulence, imperfect vertical transmission, horizontal transmission late in the host's life cycle and low dispersion of propagules in the environment. Major features of the population dynamics of insects interacting with such diseases are (1) long, high amplitude cycles especially in marginal habitats where rates of increase are low; (2) regulation, even by low-virulence pathogens; (3) prolonged low host density between peaks; and (4) low average disease prevalence in cases of high virulence. Vertically transmitted diseases, though often of low virulence, may be essential elements of the population dynamics of many insect pests.