Major hypotheses on the adaptive significance of insect gall formation are reviewed: nonadaptive, plant protection, mutual benefit, nutrition, microenvironment, and enemy hypotheses. We evaluate the validity of each, and find the first three to be without merit because galls clearly have adaptive features for the insect, but few if any for the plant, and the galler has negative impact on the plant, making the relationship parasitic. Predictions are developed to enable testing of hypotheses, and tests are discussed. Nutrition and microenvironment hypotheses are supported, while the enemy hypothesis remains with several uncertain issues to be resolved. The evolution of the galling habit has followed two pathways, one via mining plant tissues and the other from sedentary external herbivores that then modify plant growth. In each route the sequence of selective factors was probably different, but improved protection from hygrothermal stress and improved nutrition are of primary importance, and protection from enemies probably reinforced the galling habit.