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Phosphorus is the second important key element after nitrogen as a mineral nutrient in terms of quantitative plant requirement. Although abundant in soils, in both organic and inorganic forms, its availability is restricted as it occurs mostly in insoluble forms. The P content in average soil is about 0.05% (w/w) but only 0.1% of the total P is available to plant because of poor solubility and its fixation in soil (Illmer and Schinner, Soil Biol Biochem 27:257-263, 1995). An adequate supply of phosphorus during early phases of plant development is important for laying down the primordia of plant reproductive parts. It plays significant role in increasing root ramification and strength thereby imparting vitality and disease resistance capacity to plant. It also helps in seed formation and in early maturation of crops like cereals and legumes. Poor availability or deficiency of phosphorus (P) markedly reduces plant size and growth. Phosphorus accounts about 0.2 - 0.8% of the plant dry weight. To satisfy crop nutritional requirements, P is usually added to soil as chemical P fertilizer, however synthesis of chemical P fertilizer is highly energy intensive processes, and has long term impacts on the environment in terms of eutrophication, soil fertilility depletion, carbon footprint. Moreover, plants can use only a small amount of this P since 75-90% of added P is precipitated by metal-cation complexes, and rapidly becomes fixed in soils. Such environmental concerns have led to the search for sustainable way of P nutrition of crops. In this regards phosphate-solubilizing microorganisms (PSM) have been seen as best eco-friendly means for P nutrition of crop. Although, several bacterial (pseudomonads and bacilli) and fungal strains (Aspergilli and Penicillium) have been identified as PSM their performance under in situ conditions is not reliable and therefore needs to be improved by using either genetically modified strains or co-inoculation techniques. This review focuses on the diversity of PSM, mechanism of P solubilization, role of various phosphatases, impact of various factors on P solubilization, the present and future scenario of their use and potential for application of this knowledge in managing a sustainable environmental system.