Diverse gram-negative bacteria deliver effector proteins into the cells of their eukaryotic hosts using the type III secretion system. Collectively, these type III effector proteins function to optimize the host cell environment for bacterial growth. Type III effector proteins are essential for the virulence of Pseudomonas syringae, Xanthomonas spp., Ralstonia solanacearum and Erwinia species. Type III secretion systems are also found in nonpathogenic pseudomonads and in species of symbiotic nitrogen-fixing Rhizobium. We discuss the functions of type III effector proteins of plant-associated bacteria, with an emphasis on pathogens. Plant pathogens tend to carry diverse collections of type III effectors that likely share overlapping functions. Several effectors inhibit host defense responses. The eukaryotic host targets of only a few type III effector proteins are currently known. We also discuss possible mechanisms for diversification of the suite of type III effector proteins carried by a given bacterial strain.