With the availability of complete genome sequences of several organisms, the focus has shifted from structural genomics to functional genomics, specifically in plants where the complete genomic sequences are becoming available i.e., Arabidopsis and rice. Agrobacterium mediated transformation which is exploited for transgenic technology is also being used as an effective mutagen and as a tool for functional genomics in higher plants. Besides the fact that the insertion of T-DNA element into a gene can lead to loss or gain of function, ingenious use of a variety of vectors have led to the identification of genes and regulatory elements in Arabidopsis. In this review, we highlight the progress made in the field of functional genomics of Arabidopsis using T-DNA tagging. Since this strategy has been very successfully employed in Arabidopsis and is now being extended to other plant species, we discuss the various vectors and experimental approaches employed to tag, identify and clone genes and promoter elements in Arabidopsis using T-DNA as a tool.