Under nitrogen-limiting conditions, bacteria from the family Rhizobiaceae establish a symbiosis with leguminous plants to form nitrogen-fixing root nodules. These organs require a coordinated control of the spatiotemporal expression of plant and bacterial genes during morphogenesis. Both plant and bacterial signals are involved in this regulation in the plant host. Plant genes induced during nodule development, the so-called nodulin genes, have been extensively characterized. Products of several of these genes show homologies to known regulators of signal transduction pathways in other plant or animal systems. Initial functional analysis of the molecular mechanisms implicated in nodulation have been undertaken using model legumes. Insertion mutagenesis and transgenic technologies to modify nodulin gene expression, as well as pharmacologic approaches, have been used to analyze molecular mechanisms involved in morphologic responses induced by the bacterial symbiont in the plant. G protein-mediated transduction mechanisms have been implicated, and the nin transcription factor appears to be required for early steps in nodule development. ENOD40, a gene coding for an RNA that contains only short ORFs, seems to be closely tied to nodule primordium formation. In addition, a vascular-associated Krüppel-like transcription factor and small Rab type G-proteins affect bacteroid differentiation and the function of the nitrogen-fixing zone. These initial results presage a wealth of information that will be obtained from the application of genomic approaches to legumes.