In many regions dengue incidence fluctuates seasonally with few if any infections reported in unfavourable periods. It has been hypothesized that vertical transmission within the mosquito population allows the virus to persist at these times. A review of the literature shows that vertical infection efficiencies are 1–4%. Using a mathematical model we argue that at these infection rates vertical transmission is not an important factor for long term virus persistence. In endemic situations, increases in reproductive number, half-life and persistence times of the disease only become significant when vertical infection efficiency exceeds 20–30%. In epidemic situations vertical infection accelerates the course of the outbreak and may actually reduce persistence time. These results stem from the fact that the mosquito life-cycle is relatively rapid and vertically acquired infections are multiplicatively diluted with every generation. When the efficiency of vertical infection is as low as reported from empirical studies, the virus is rapidly lost unless there is regular amplification in the human population. Processes such as asymptomatic human dengue cases are therefore more likely to be important in persistence than transmission within the vector population. The empirical data are not, however, unequivocal and we identify several areas of research that would further clarify the role of vertical transmission in the epidemiology of dengue.