Agrobacterium-mediated genetic transformation has been widely used for the production of genetically modified transgenic plants to obtain specific desired traits. Most of the molecular mechanisms that underlie the transformation steps have been well elucidated over the years. However, a few steps, such as nuclear targeting, T-DNA integration, and Agrobacterium-plant proteins involved remain largely obscure and are still under extensive studies. This review describes the major steps involved in the molecular mechanism of Agrobacterium-mediated transformation and provides insight in the recent developments in studies on the Agrobacterium-mediated genetic transformation system. Some factors affecting the transformation efficiency are also briefly discussed.