Arthropods have small but sophisticated brains that have enabled them to adapt their behavior to a diverse range of environments. In this review, we first discuss some of general characteristics of the arthropod “microbrain” in comparison with the mammalian “megalobrain”. Then we discuss about recent progress in the study of sensory and memory-processing systems of the arthropod “microbrain”. Results of recent studies have shown that (1) insects have excellent capability for elemental and context-dependent forms of olfactory learning, (2) mushroom bodies, higher olfactory and associative centers of arthropods, have much more elaborated internal structures than previously thought, (3) many genes involved in the formation of basic brain structures are common among arthropods and vertebrates, suggesting that common ancestors of arthropods and vertebrates already had organized head ganglia, and (4) the basic organization of sensori-motor pathways of the insect brain has features common to that of the mammalian brain. These findings provide a starting point for the study of brain mechanisms of elaborated behaviors of arthropods, many of which remain unexplored.