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Upon entering the soil environment, extracellular DNA is subjected to dynamic biological, physical, and chemical factors that determine its fate. This review concerns the fate of both recombinant and non-recombinant sources of DNA. A schematic of DNA cycling coupled with genetic transformation is presented to understand its behavior in soil. Extracellular DNA may persist through cation bridging onto soil minerals and humic substances, be enzymatically degraded and restricted by DNases of microbial origin, and/or enter the microbial DNA cycle through natural transformation of competent bacteria. Lateral gene transfer may disseminate DNA through the microbial community. An understanding of DNA cycling is fundamental to elucidating the fate of extracellular DNA in the soil environment.