Upon host penetration, fungal pathogens secrete a plethora of effectors to promote disease, including proteases that degrade plant antimicrobial proteins, and protease inhibitors (PIs) that inhibit plant proteases with antimicrobial activity. Conversely, plants secrete proteases and PIs to protect themselves against pathogens or to mediate recognition of pathogen proteases and PIs, which leads to induction of defense responses. Many examples of proteases and PIs mediating effector-triggered immunity in host plants have been reported in the literature, but little is known about their role in compromising basal defense responses induced by microbe-associated molecular patterns. Recently, several reports appeared in literature on secreted fungal proteases that modify or degrade pathogenesis-related proteins, including plant chitinases or PIs that compromise their activities. This prompted us to review the recent advances on proteases and PIs involved in fungal virulence and plant defense. Proteases and PIs from plants and their fungal pathogens play an important role in the arms race between plants and pathogens, which has resulted in co-evolutionary diversification and adaptation shaping pathogen lifestyles.