Because of their ability to transform atmospheric N2 into ammonia that can be used by the plant, researchers were originally very optimistic about the potential of associative diazotrophic bacteria to promote the growth of many cereals and grasses. However, multiple inoculation experiments during recent decades failed to show a substantial contribution of Biological Nitrogen Fixation (BNF) to plant growth in most cases. It is now clear that associative diazotrophs exert their positive effects on plant growth directly or indirectly through (a combination of) different mechanisms. Apart from fixing N2, diazotrophs can affect plant growth directly by the synthesis of phytohormones and vitamins, inhibition of plant ethylene synthesis, improved nutrient uptake, enhanced stress resistance, solubilization of inorganic phosphate and mineralization of organic phosphate. Indirectly, diazotrophs are able to decrease or prevent the deleterious effects of pathogenic microorganisms, mostly through the synthesis of antibiotics and/or fungicidal compounds, through competition for nutrients (for instance, by siderophore production) or by the induction of systemic resistance to pathogens. In addition, they can affect the plant indirectly by interacting with other beneficial microorganisms, for example, Azospirillum increasing nodulation of legumes by rhizobia. The further elucidation of the different mechanisms involved will help to make associative diazotrophs a valuable partner in future agriculture.