The ability to sense and respond to a rewarding stimulus is a key advantage for animals in their natural environment. The circuits that mediate these responses are complex, and it has been difficult to identify the fundamental principles of reward structure and function. However, the well-characterized brain anatomy and sophisticated neurogenetic tools in Drosophila melanogaster make the fly an ideal model to understand the mechanisms through which reward is encoded. Drosophila find food, water, intoxicating substances, and social acts rewarding. Basic monoaminergic neurotransmitters, including dopamine (DA), serotonin (5-HT), and octopamine (OA), play a central role in encoding these rewards. DA is central to sensing, encoding, responding, and predicting reward, whereas 5-HT and OA carry information about the environment that influences DA circuit activity. In contrast, slower-acting neuromodulators such as hormones and neuropeptides play a key role in both encoding the pleasurable stimulus and modulating how the internal environment of the fly influences reward sensation and seeking. Recurring circuit motifs for reward signaling identified in Drosophila suggest that these key principles will help elucidate understanding of how reward circuits function in all animals.