Many legumes respond to Rhizobium inoculation by developing unique structures known as nodules on their roots. The development of a legume nodule in which rhizobia convert atmospheric N2 into ammonia is a finely tuned process. Gene expression from both partners of the symbiosis must be temporally and spatially coordinated. Exactly how this coordination takes place is an area of intense study. Nodule morphogenesis appears to be elicited by at least two distinct signals: one from Rhizobium, a product of the nod genes (Nod factor), and a second signal, which is generated within plant tissues after treatment with Nod factor. The identity of the second signal is unknown but changes in the balance of endogenous plant hormones or the sensitivity of plant tissues to these hormones are likely to be involved. These hormonal changes may be triggered by endogenous flavonoids produced by the root in response to inoculation with Rhizobium. There is some controversy as to whether the legume nodule is an organ sui generis or a highly derived lateral root. A resolution of this question may become more critical as attempts to induce nodules on non-legume hosts, such as rice or maize, increase in number and scope.