Interactions between invasive insects and their fungal associates have important effects on the behavior, reproductive success, population dynamics and evolution of the organisms involved. The red turpentine beetle (RTB), Dendroctonus valens LeConte (Coleoptera: Scolytinae), an invasive forest pest in China, is closely associated with fungi. By carrying fungi on specialized structures in the exoskeleton, RTB inoculates fungi in the phloem of pines (when females dig galleries for egg laying and when males join them for mating). After eggs hatch, larvae gregariously feed on the phloem colonized by the fungi. We examined the effects of five isolates of RTB associated fungi (two from North America, Leptographium terebrantis and L. procerum, and three from China, Ophiostoma minus, L. sinoprocerum and L. procerum) on larval feeding activity, development and mortality. We also studied the effects of volatile chemicals produced in the beetle hindgut on fungal growth. Ophiostoma minus impaired feeding activity and reduced weight in RTB larvae. Leptographium sinoprocerum, L. terebrantis and L. procerum did not dramatically influence larval feeding and development compared to fungi-free controls. Larval mortality was not influenced by any of the tested fungi. Hindgut volatiles of RTB larvae, verbenol, myrtenol and myrtenal, inhibited growth rate of all the fungi. Our results not only show that D. valens associated fungus, O. minus, can be detrimental to its larvae; but, most importantly, they also show that these notorious beetles have an outstanding adaptive response evidenced by the ability to produce volatiles that inhibit growth of harmful fungus.