Globally crop pathogens and pests cause significant yield and quality losses in agriculture production systems. Foliar fungal diseases of small grain cereals are economically among the most important diseases worldwide and in the Baltics. Finding an effective, reliable, and easily accessible method for plant disease diagnosis still presents a challenge. Currently used methods include visual examination of the affected plant, morphological characterization of isolated pathogens and different molecular, and serological methods. All of these methods have important limitations, especially for large-area applications. Hyperspectral imaging is a promising technique to assess fungal diseases of plants, as it is a non-invasive, indirect detection method, where the plant’s responses to the biotic stress are identified as an indicator of the disease. Hyperspectral measurements can reveal a relationship between the spectral reflectance properties of plants and their structural characteristics, pigment concentrations, water level, etc., which are considerably influenced by biotic plant stress. Despite the high accuracy of the information obtained from hyperspectral detectors, the interpretation is still problematic, as it is influenced by various circumstances: noise level, lighting conditions, abiotic stress level, a complex interaction of the genotype and the environment, etc. The application of hyperspectral imaging in everyday farming practice will potentially allow farmers to obtain timely and precise information about the development of diseases and affected areas. This review provides an introduction into issues of hyperspectral imaging and data analysis and explores the published reports of worldwide research on the use of hyperspectral analysis in the detection of foliar fungal diseases of small-grain cereals.