Phytoremediation is the use of plants for the treatment of environmental pollution, including chlorinated organics. Although conceptually very attractive, removal and biodegradation of chlorinated pollutants by plants is a rather slow and inefficient process resulting in incomplete treatment and potential release of toxic metabolites into the environment. In order to overcome inherent limitations of plant metabolic capabilities, plants have been genetically modified, following a strategy similar to the development of transgenic crops: genes from bacteria, fungi, and mammals involved in the metabolism of organic contaminants, such as cytochrome P-450 and glutathione S-transferase, have been introduced into higher plants, resulting in significant improvement of tolerance, removal, and degradation of pollutants. Recently, plant-associated bacteria have been recognized playing a significant role in phytoremediation, leading to the development of genetically modified rhizospheric and endophytic bacteria with improved biodegradation capabilities. Transgenic plants and associated bacteria constitute a new generation of genetically modified organisms for efficient and environmental-friendly treatment of polluted soil and water. This review focuses on recent advances in the development of transgenic plants and bacteria for the treatment of chlorinated pollutants, including chlorinated solvents, polychlorinated phenols, and chlorinated herbicides.