Biological sources of nutrients are gaining importance over the chemical and organic sources from the standpoint of environmental safety and quality, and sustainable agriculture. The nutrient input for a growing rice crop can largely be met by promoting the activities of physiologically diverse microorganisms in the aerobic, anaerobic and interface zones in the ecologically important flooded soils. Associative bacteria contribute from 10 to 80 kg N per hectare per cropping season depending upon the ecosystem, cultural practices and rice variety grown. In addition to N contribution, these bacterial associations can improve the nutrient transformations and contribute to plant growth-promoting effects. Current improved agronomic and crop production management systems greatly affect the contributions of biological sources to the overall soil nutrient status. Azospirillum and other associative bacterial systems have been intensively researched using various evaluation techniques to understand the diazotrophic rhizocoenosis. Researches clearly indicate that these associations are governed by several soil, water, nutrient, agrochemical, plant genotype and other biological factors. Considerable efforts have been made so far in selecting efficient bacterial strains as inoculants and identifying host genotypes which support maximum nitrogenase activity in addition to other beneficial traits of effective associative relationships. Knowledge gained so far on how the N2-fixing system in rice functions suggests the need for providing optimum management practices to ensure greater contribution from the plant-microbe associations. Holistic approaches integrating technological developments and achievements in biological sciences could lead to crop improvement. Research on extending nitrogen-fixing symbiosis to rice using molecular and genetic approaches is underway, albeit at a slow pace. The need for further fine-tuning and developing management practices, innovative approaches to improve rice-bacterial systems and the strategies to sustain the benefits from associative diazotrophy are discussed.