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The use of excess conventional Phosphorus (P) fertilizers to improve agricultural productivity, in order to meet constantly increasing global food demand, potentially causes surface and ground water pollution, waterway eutrophication, soil fertility depletion, and accumulation of toxic elements such as high concentration of selenium (Se), arsenic (As) in the soil. Quite a number of soil microorganisms are capable of solubilizing/mineralizing insoluble soil phosphate to release soluble P and making it available to plants. These microorganisms improve the growth and yield of a wide variety of crops. Thus, inoculating seeds/crops/soil with Phosphate Solubilizing Microorganisms (PSM) is a promising strategy to improve world food production without causing any environmental hazard. Despite their great significance in soil fertility improvement, phosphorus-solubilizing microorganisms have yet to replace conventional chemical fertilizers in commercial agriculture. A better understanding of recent developments in PSM functional diversity, colonizing ability, mode of actions and judicious application should facilitate their use as reliable components of sustainable agricultural systems. In this review, we discussed various soil microorganisms that have the ability to solubilize phosphorus and hence have the potential to be used as bio fertilizers. The mechanisms of inorganic phosphate solubilization by PSM and the mechanisms of organic phosphorus mineralization are highlighted together with some factors that determine the success of this technology. Finally we provide some indications that the use of PSM will promote sustainable agriculture and conclude that this technology is ready for commercial exploitation in various regions worldwide.