Transgenic or genetically modified plants possess novel genes that impart beneficial characteristics such as herbicide resistance. One of the least understood areas in the environmental risk assessment of genetically modified crops is their impact on soil- and plant-associated microbial communities. The potential for interaction between transgenic plants and plant residues and the soil microbial community is not well understood. The recognition that these interactions could change microbial biodiversity and affect ecosystem functioning has initiated a limited number of studies in the area. At this time, studies have shown the possibility that transgenes can be transferred to native soil microorganisms through horizontal gene transfer, although there is not evidence of this occurring in the soil. Furthermore, novel proteins have been shown to be released from transgenic plants into the soil ecosystem, and their presence can influence the biodiversity of the microbial community by selectively stimulating the growth of organisms that can use them. Microbial diversity can be altered when associated with transgenic plants; however, these effects are both variable and transient. Soil- and plant-associated microbial communities are influenced not only by plant species and transgene insertion but also by environmental factors such as field site and sampling date. Minor alterations in the diversity of the microbial community could affect soil health and ecosystem functioning, and therefore, the impact that plant variety may have on the dynamics of the rhizosphere microbial populations and in turn plant growth and health and ecosystem sustainability, requires further study.