Cyclic hydroxamic acids and lactams are allelochemicals present in the common agricultural crops wheat, rye, and maize. The hydroxamic acids are mainly present in the plants as glucosides. Upon injury or insect attack or when exuded to the soil environment, the hydroxamic acids occur in their unstable agluconic form. In the first step in the transformation of hydroxamic acids, benzoxazolinones are formed spontaneously. It is necessary to elucidate the further microbial transformation of these compounds in the soil environment for a purposeful exploitation of the allelopathic properties of wheat, rye, and maize. In the present paper, the existing knowledge on microbial transformation products of benzoxazolin-2-one (BOA), 6-methoxy-benzoxazolin-2-one (MBOA), and 2-hydroxy-1,4-benzoxazin-3-one (HBOA) was reviewed. Three main groups of transformation products were identified: aminophenoxazinones, malonamic acids, and acetamides. Future research needs concerning the transformation of these chemicals in soil are discussed, when their properties for suppressing weeds and soil-borne diseases are going to be exploited.