-An unprecedented, rapid change in environmental conditions is being observed, which invariably overrules the adaptive capacity of land plants. These environmental changes mainly originate from anthropogenic activities, which have aggravated air and soil pollution, acid precipitation, soil degradation, salinity, contamination of natural and agro-ecosystems with heavy metals such as cadmium (Cd), lead (Pb), mercury (Hg), arsenic (As), global climate change, etc. The restoration of degraded natural habitats using sustainable, low-input cropping systems with the aim of maximizing yields of crop plants is the need of the hour. Thus, incorporation of the natural roles of beneficial microorganisms in maintaining soil fertility and plant productivity is gaining importance and may be an important approach. Symbiotic association of the majority of crop plants with arbuscular mycorrhizal (AM) fungi plays a central role in many microbiological and ecological processes. In mycorrhizal associations, the fungal partner assists its plant host in phosphorus (P) and nitrogen (N) uptake and also some of the relatively immobile trace elements such as zinc (Zn), copper (Cu) and iron (Fe). AM fungi also benefit plants by increasing water uptake, plant resistance and biocontrol of phytopathogens, adaptation to a variety of environmental stresses such as drought, heat, salinity, heavy metal contamination, production of growth hormones and certain enzymes, and even in the uptake of radioactive elements. The establishment of symbiotic association usually involves mutual recognition and a high degree of coordination at the morphological and physiological level, which requires a continuous cellular and molecular dialogue between both the partners. This has led to the identification of the genes, signal transduction pathways and the chemical structures of components relevant to symbiosis; however, scientific knowledge on the physiology and function of these fungi is still limited. This review unfolds our current knowledge on signals and mechanisms in the development of AM symbiosis; the molecular basis of nutrient exchange between AM fungi and host plants; and the role of AM fungi in water uptake, disease protection, alleviation of various abiotic soil stresses and increasing grain production.