Agrobacterium rhizogenes is the etiological agent for hairy-root disease (also known as root-mat disease). This bacterium induces the neoplastic growth of plant cells that differentiate to form “hairy roots.” Morphologically, A. rhizogenes-induced hairy roots are very similar in structure to wild-type roots with a few notable exceptions: Root hairs are longer, more numerous, and root systems are more branched and exhibit an agravitropic phenotype. Hairy roots are induced by the incorporation of a bacterial-derived segment of DNA transferred (T-DNA) into the chromosome of the plant cell. The expression of genes encoded within the T-DNA promotes the development and production of roots at the site of infection on most dicotyledonous plants. A key characteristic of hairy roots is their ability to grow quickly in the absence of exogenous plant growth regulators. As a result, hairy roots are widely used as a trans-genic tool for the production of metabolites and for the study of gene function in plants. Researchers have utilized this tool to study root development and root–biotic interactions, to overexpress proteins and secondary metabolites, to detoxify environmental pollutants, and to increase drought tolerance. In this review, we provide an up-to-date overview of the current knowledge of how A. rhizogenes induces root formation, on the new uses for A. rhizogenes in tissue culture and composite plant production (wild-type shoots with transgenic roots), and the recent development of a disarmed version of A. rhizogenes for stable transgenic plant production.