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Trace conditioning is a form of associative learning that can be induced by presenting a conditioned stimulus (CS) and an unconditioned stimulus (US) following each other, but separated by a temporal gap. This gap distinguishes trace conditioning from classical delay conditioning, where the CS and US overlap. To bridge the temporal gap between both stimuli and to form an association between CS and US in trace conditioning, the brain must keep a neural representation of the CS after its termination – a stimulus trace. Behavioral and physiological studies on trace and delay conditioning revealed similarities between the two forms of learning, like similar memory decay and similar odor identity perception in invertebrates. On the other hand differences were reported also, like the requirement of distinct brain structures in vertebrates or disparities in molecular mechanisms in both vertebrates and invertebrates. For example, in commonly used vertebrate conditioning paradigms the hippocampus is necessary for trace but not for delay conditioning, and Drosophila delay conditioning requires the Rutabaga adenylyl cyclase, which is dispensable in trace conditioning. It is still unknown how the brain encodes CS traces and how they are associated with a US in trace conditioning. Insects serve as powerful models to address the mechanisms underlying trace conditioning, due to their simple brain anatomy, behavioral accessibility and established methods of genetic interference. In this review we summarize the recent progress in insect trace conditioning on the behavioral and physiological level and emphasize similarities and differences compared to delay conditioning. Moreover, we examine proposed molecular and computational models and reassess different experimental approaches used for trace conditioning.