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The research efforts in microbiology over last two decades have focussed on assessing the microbial diversity in various soil types and cropping systems in all agro-eco-regions, including extreme environments resulting in creation of a vast repository of microorganisms, free living and endophytes. A marked departure from the past is their identification by both conventional and molecular methods, resulting in discovery of many novel species. The effects of various soil and agronomic management practices were assessed on soil microbial diversity and soil health by both classical and metagenomic approach. The beneficial effects of organic and integrated farming, and adverse effects of chemical intensification have been assessed, leading to the identification of actinobacteria as important players in maintaining soil health. A major impact has been the firm attention received from policy makers on the urgent need to conserve soil biodiversity and improve soil health. Identification of rapid methods of soil biological health assessment, improved rhizobial inoculants, microbial technology for rapid in situ and ex situ residue and waste breakdown, and mitigating climate change effects are the current priorities. Future priorities include assessment of the structure and function of the vast reservoir of unculturable microbes; deleterious microorganisms, assessment of soil-plant-microbe continuum and plant immunity modulation by microbes; rhizosphere engineering, role of archaea in maintaining soil health, microbial methods to improve soil organic matter formation; assessment and quantification of ecosystem services rendered by agriculturally important microorganisms; and improved microbial technology for biofertilizers and delivery systems. The tremendous advances in agricultural microbiology in last two decades in India are a cause for optimism that solutions will be forged for the above challenges using both classical and modern approaches, thereby ushering in the process more sustainable agricultural systems.