New liquid fermentation techniques for the production of the bioinsecticidal fungus Metarhizium brunneum strain F-52 have resulted in the formation of microsclerotia (MS), a compact, melonized-hyphal structure capable of surviving desiccation and formulation as dry granules. When rehydrated, these MS granules germinate to produce conidia that can infect susceptible insects. Fermentation media containing cottonseed or soy flours as nitrogen sources and formulated at two carbon to nitrogen ratios (C:N), 30:1 or 50:1, were evaluated for production of microsclerotia. Dry MS granule samples were compared for storage stability based on conidia production, and insecticidal activity against larvae of the lesser mealworm, Alphitobius diaperinus (Panzer), using a potting soil bioassay. Cottonseed and soy flours were equivalent for production, MS granule viability, and insecticidal activity. Fermentation media containing higher nitrogen concentrations (30:1 C:N) resulted in greater biomass accumulation and greater production of conidia from granules regardless of the nitrogen source. MS granules made with M. brunneum cultures grown in media with 30:1 C:N produced 8.5 × 10⁹ conidia per gram of granules after 8-d incubation, significantly higher than MS granules made using fungus produced using 50:1 C:N media (5.5 × 10⁹ conidia per gram dry MS granules). The LC₅₀ for larval mortality was 8.05 × 10⁵ conidia per cup, equivalent to applications of 94 or 147 µg granules per cup for granules made from high and low nitrogen media, respectively. Measurements of water activity were not significantly different among granule samples (0.28–0.29) even though granules made from high nitrogen media had higher moisture content (>5.2%) compared with granules made from low nitrogen media (<4.6%). Higher initial conidial production was reflected in longer storage stability at 25°C, with half-lives estimated at 3.7 and 1.7 wk for 30:1 and 50:1 C:N ratios, respectively. These results support further evaluation of MS granule formulations for the control of soil-inhabiting insect pests.