Fragrance or aroma in rice is considered as a special trait with huge economic importance that determines the premium price in global trade. With the availability of molecular maps and genome sequences, a major gene for fragrance (badh2) was identified on chromosome 8. An 8-bp deletion in the exon 7 of this gene was reported to result in truncation of betaine aldehyde dehydrogenase enzyme whose loss-of-function lead to the accumulation of a major aromatic compound, 2-acetyl 1-pyrroline (2AP) in fragrant rice. However, several studies have reported exceptions to this mutation and indicated the involvement of other genetic loci in controlling fragrance trait. These studies emphasize the need to characterize the fragrance and its underlying factors in a wide range of genetic resources available for this trait. This review summarizes the new insights gained on the genetic and molecular understanding of fragrance in rice.