Biological nitrogen fixation by Rhizobium-legume symbioses represents an environmentally friendly and inexpensive alternative to the use of chemical nitrogen fertilizers in legume crops. Rhizobial inoculants, applied frequently as biofertilizers, play an important role in sustainable agriculture. However, inoculants often fail to compete for nodule occupancy against native rhizobia with inferior nitrogen-fixing abilities, resulting in low yields. Strains with excellent performance under controlled conditions are typically selected as inoculants, but the rates of nodule occupancy compared to native strains are rarely investigated. Lack of persistence in the field after agricultural cycles, usually due to the transfer of symbiotic genes from the inoculant strain to naturalized populations, also limits the suitability of commercial inoculants. When rhizobial inoculants are based on native strains with a high nitrogen fixation ability, they often have superior performance in the field due to their genetic adaptations to the local environment. Therefore, knowledge from laboratory studies assessing competition and understanding how diverse strains of rhizobia behave, together with assays done under field conditions, may allow us to exploit the effectiveness of native populations selected as elite strains and to breed specific host cultivar-rhizobial strain combinations. Here, we review current knowledge at the molecular level on competition for nodulation and the advances in molecular tools for assessing competitiveness. We then describe ongoing approaches for inoculant development based on native strains and emphasize future perspectives and applications using a multidisciplinary approach to ensure optimal performance of both symbiotic partners.