It became increasingly important to regulate phosphorus (P) loss from P-rich agricultural fields because of accelerated eutrophication and hypoxia in freshwater and coastal marine systems in the world. Understanding the P stabilization mechanisms in soils, such as mineralization and immobilization, will help in adopting good agricultural management practices and implementing watershed-scale monitoring programs. This review examined the current knowledge of P mineralization and immobilization in soils and physicochemical factors that are influencing the terrestrial P cycle. It has been our common knowledge that a ratio of C:P in organic residue controls the fate of P in soils. Accepted thresholds for mineralization and immobilization are approximately 200:1 and 300:1, respectively. However, it was found that various abiotic and biotic factors influence the P mineralization and immobilization in soils. In this chapter, we reviewed P mineralization/immobilization studies that examined the impact of microbial C:P ratio, pH, labile organic and inorganic P, aeration, moisture content, types of organic C and N, microbial biomass, vegetation type, and microbial- and plant-driven phosphatase activity, and intensity of anthropogenic management. In summary, we presented uncertainties from conflicting results that require further examination.