The interaction between legumes and rhizobia leads to the establishment of a beneficial symbiotic relationship. Recent advances in legume - rhizobium symbiosis revealed that various reactive oxygen and nitrogen species including nitric oxide (NO) play important roles during this process. Nodule development occurs with a transition from a normoxic environment during the establishment of symbiosis to a microoxic environment in functional nodules. Such oxygen dynamics are required for activation and repression of various NO production and scavenging pathways. Both the plant and bacterial partners participate in the synthesis and degradation of NO. However, the pathways of NO production and degradation as well as their cross-talk and involvement in the metabolism are still a matter of debate. The plant-originated reductive pathways are known to contribute to the NO production in nodules under hypoxic conditions. Non-symbiotic hemoglobin (phytoglobin) (Pgb) possesses high NO oxygenation capacity, buffers and scavenges NO. Its operation, through a respiratory cycle called Pgb-NO cycle, leads to the maintenance of redox and energy balance in nodules. The role of Pgb/NO cycle under fluctuating NO production from soil needs further investigation for complete understanding of NO regulatory mechanism governing nodule development to attain optimal food security under changing environment.