Rhizobium is able to induce the formation of a new organ on roots of leguminous plants, the root nodule, in which the penetrated bacteria fix atmospheric nitrogen. This process is initiated by specific lipo-oligosaccharides, called Nod factors, secreted by the bacterium. Nodule formation proceeds through distinct steps like infection thread formation and activation of mitotic activity in cortical cells. During these steps specific plant genes, nodulin genes, are induced and several of these have been identified and characterized. Nodulin genes are used now as markers to study Nod factor perception and signal transduction.