is (also) an epithet for a gay
man, particularly an effiminate gay man.
The Online Etymology Dictionary reports that this narrow sense was first used in 1935, about the same time "gay" came to mean "homosexual" in American prisons. Conjecturally it derives from the light, sweet, colorful nature of fruit. I'm not sure that Carmen Miranda's definingly campy fruit-laden performance in The Gang's All Here had nothing to do with entrenching the term eight years later. Double negative intended, eds.
Some media examples:
"All in the Family" (1971)
Archie Bunker: "I ain't gonna carry that umbrella, Edith, if the guys at work saw me walk in with that, they'd think I've turned into an English fruit."
Miss Scarlet (to the acting-gay Mr. Green): "A plant? I thought men like you were usually called a fruit."
2003 News reports
Brazilian football star Ronaldo publicly claimed that David Beckham was a "kiwi fruit" for wearing his wife's thong. According to Ronaldo, kiwi fruit is slang for (masculine) homosexual because "they are hairy on the outside, but fruity on the inside".
There is even an entire scene in the movie Zorro, the Gay Blade, as reports come to the alcalde about the recent colorfully-dressed crime spree. The humor is built around the fact that the alcalde and his minions are too stupid to get the hint that Zorro (the gay one) is wearing colors of fruit. "Ahaaa! Two fruit, one flower, and one vegetable...I think he is trying to tell me something!"
Today the term feels dated, underpowered, and more fitting a schoolage bully than an adult. If you were to use this in an attempt to deride an adult gay man, you are more likely to be met with laughter than with tears. Still, it is more media-friendly than the unimaginative alternates fag or faggot, so could conceivably show up in a belabored after-school special about tolerance.
This slang roots many corrollary terms such as fruit fly (a woman who hangs out with gay guys), and fruit loops, which can mean either freedom rings, or the circuits (some) gay men walk while cruising a particular place (such as a bar).