Microorganisms with the capacity to reduce the greenhouse gas nitrous oxide (N2O) to harmless dinitrogen gas are receiving increased attention due to increasing N2O emissions (and our need to mitigate climate change) and to recent discoveries of novel N2O-reducing bacteria and archaea. The diversity of denitrifying and nondenitrifying microorganisms with capacity for N2O reduction was recently shown to be greater than previously expected. A formerly overlooked group (clade II) in the environment include a large fraction of nondenitrifying N2O reducers, which could be N2O sinks without major contribution to N2O formation. We review the recent advances about fundamental understanding of the genomics, physiology, and ecology of N2O reducers and the importance of these findings for curbing N2O emissions.