The pattern of linearly polarized light in the sky can be used for orientation behavior by many insects. Although such behavioral responses have been well described in bees and ants over several decades, until recently it remained largely elusive how polarized-light information is processed in the insect brain. However, over the last decade, substantial advances in understanding polarized- light processing have been made, based on behavioral, electrophysiological, and anatomical data. Particularly, progress was made in the desert locust, but based on comparative work in the field cricket, the monarch butterfly, and the fruit fly broader conclusions about how polarized-light information is encoded in the insect brain in general begin to emerge. After polarized light is detected by photoreceptors of specialized parts of the compound eye, this information passes through the optic lobe, the anterior optic tubercle, and the central complex. In these brain regions, detailed neural responses to polarized light have been characterized in a large set of anatomically defined neurons that together comprise the polarization vision net- work. This work has begun to unravel how polarized light is integrated with unpolarized light, and how response characteristics of involved neurons are modu- lated in context-dependent ways. Eventually, all skylight cues appear to be com- bined to generate a neural representation of azimuthal space around the animal in the central complex of the brain, which could be used as a basis for directed behavior. Polarized-light information is likely contributing to such a representation in many insects and thus this modality could be crucial for illuminating how the insect brain in general encodes the position of the animal in space, a task that all animal brains have to master.