Lactococcus lactis is the primary model organism for lactic acid bacteria (LAB) and is widely used in the production of fermented dairy products. In recent years there has been increasing interest in strains isolated from non-dairy environments, as these exhibit a high metabolic diversity and have unique flavour-forming activities. Recent progress has been made in understanding the natural diversity and adaptive responses of L. lactis from dairy and non-dairy origins. Genome sequencing and comparative genomics have also had an impact on understanding natural diversity within the species, and have provided new opportunities for industrial strain development.