Legumes, unlike most land plants, can form symbiotic root nodules with nitrogen-fixing bacteria to secure nitrogen for growth. The formation of nitrogen-fixing nodules on legume roots requires the coordination of rhizobial infection at the root epidermis with cell division in the cortex. The nodules house the nitrogen-fixing rhizobia in organelle-like structures known as symbiosomes, which enable nitrogen fixation and facilitate the exchange of metabolites between the host and symbionts. In addition to this beneficial interaction, legumes are continuously exposed to would-be pathogenic microbes; therefore the ability to discriminate pathogens from symbionts is a major determinant of plant survival under natural conditions. Here, we summarize recent advances in the understanding of root nodule symbiosis signaling, transcriptional regulation, and regulation of plant immunity during legume–rhizobium symbiosis. In addition, we propose several important questions to be addressed and provide insights into the potential for engineering the capacity to fix nitrogen in legume and non-legume plants.