Arsenic (As) is a metalloid toxic to organisms including humans. Arsenic in rice represents a significant exposure pathway for the general population, particularly for those subsisting on rice. Arsenic transformation, namely reduction, oxidation and methylation, in soil-rice systems has fundamental impacts on its mobility and toxicity. In addition to soil chemical properties (pH, Eh, metallic oxides, organic matter), microorganisms play critical roles in As transformation and mobility in paddy soil, such as through ArsM (As(III) S-adenosylmethyltransferase) and interactions with iron oxides or organic matters. Arsenic species in paddy soil directly influence As speciation in rice grain because the methylated As species in rice are mainly derived from microbial methylation in paddy soil. This paper aims to provide an overview on the status of the knowledge and gaps on the chemical aspects of As transformation in soil-rice system in conjunction with microbial ecology and functional genes. In addition, potential pathways (manipulation of microorganisms in paddy soil and genetic engineering) to decrease total As and/or inorganic As in rice grain are proposed.