Bacteria account for a major proportion of Earth's biological diversity. They play essential roles in quite diverse environments and there has been an increasing interest in bacterial biodiversity. Research using novel and efficient tools to identify and characterize bacterial communities has been the key for elucidating biological activities with potential for industrial application. The current approach used for defining bacterial species is based on phenotypic and genomic properties. Traditional and novel DNA-based molecular methods are improving our knowledge of bacterial diversity in nature. Advances in molecular biology have been important for studies of diversity, considerably improving our knowledge of morphological, physiological, and ecological features of bacterial taxa. DNA-DNA hybridization, which has been used for many years, is still considered the golden standard for bacteria species identification. PCR-based methods investigating 16S rRNA gene sequences, and other approaches, such as the metagenome, have been used to study the physiology and diversity of bacteria and to identify novel genes with potential pharmaceutical and other biotechnological applications. We examined the advantages and limitations of molecular methods currently used to analyze bacterial diversity; these are mainly based on the 16S rRNA gene. These methods have allowed us to examine microorganisms that cannot be cultivated by routine methods and have also been useful for phylogenetic studies. We also considered the importance of improvements in microbe culture techniques and how we can combine different methods to allow a more appropriate assessment of bacterial diversity and to determine their real potential for industrial applications.