The symbiosis between legumes and nitrogen fixing bacteria called rhizobia leads to the formation of root nodules. Nodules are highly organized root organs that form in response to Nod factors produced by rhizobia, and they provide rhizobia with a specialized niche to optimize nutrient exchange and nitrogen fixation. Nodule development and invasion by rhizobia is locally controlled by feedback between rhizobia and the plant host. In addition, the total number of nodules on a root system is controlled by a systemic mechanism termed 'autoregulation of nodulation'. Both the local and the systemic control of nodulation are regulated by phytohormones. There are two mechanisms by which phytohormone signalling is altered during nodulation: through direct synthesis by rhizobia and through indirect manipulation of the phytohormone balance in the plant, triggered by bacterial Nod factors. Recent genetic and physiological evidence points to a crucial role of Nod factor-induced changes in the host phytohormone balance as a prerequisite for successful nodule formation. Phytohormones synthesized by rhizobia enhance symbiosis effectiveness but do not appear to be necessary for nodule formation. This review provides an overview of recent advances in our understanding of the roles and interactions of phytohormones and signalling peptides in the regulation of nodule infection, initiation, positioning, development, and autoregulation. Future challenges remain to unify hormone-related findings across different legumes and to test whether hormone perception, response, or transport differences among different legumes could explain the variety of nodules types and the predisposition for nodule formation in this plant family. In addition, the molecular studies carried out under controlled conditions will need to be extended into the field to test whether and how phytohormone contributions by host and rhizobial partners affect the long term fitness of the host and the survival and competition of rhizobia in the soil. It also will be interesting to explore the interaction of hormonal signalling pathways between rhizobia and plant pathogens.