Iron-sulfur (Fe-S) clusters are present in more than 200 different types of enzymes or proteins and constitute one of the most ancient, ubiquitous and structurally diverse classes of biological prosthetic groups. Hence the process of Fe-S cluster biosynthesis is essential to almost all forms of life and is remarkably conserved in prokaryotic and eukaryotic organisms. Three distinct types of Fe-S cluster assembly machinery have been established in bacteria, termed the NIF, ISC and SUF systems, and, in each case, the overall mechanism involves cysteine desulfurase-mediated assembly of transient clusters on scaffold proteins and subsequent transfer of pre-formed clusters to apo proteins. A molecular level understanding of the complex processes of Fe-S cluster assembly and transfer is now beginning to emerge from the combination of in vivo and in vitro approaches. The present review highlights recent developments in understanding the mechanism of Fe-S cluster assembly and transfer involving the ubiquitous U-type scaffold proteins and the potential roles of accessory proteins such as Nfu proteins and monothiol glutaredoxins in the assembly, storage or transfer of Fe-S clusters.