Soybean (Glycine max (L.) Merrill), is a major legume crop in the family Fabaceae. It is significant source of plant-based protein and oil, which is important determinant in the food and nutritional security of the world. However, its productivity is progressively being limited by the abiotic stresses (drought and salinity), and biotic stresses (diseases and pests). Conventional breeding has limited success due to the complex genetics of stress-responsive traits and prolonged breeding cycles. Therefore, this review critically evaluates recent advances in Agrobacterium tumefaciens-mediated transformation for soybean improvement, focusing on stress tolerance, nutritional enhancement, and transformation efficiency. This review explains about current knowledge on major stress-responsive genes and transcription factors, including DREB, NAC, bZIP, and WRKY families, in addition to Osmo protective, antioxidant, and protein/oil quality-associated genes that contribute to soybean improvement. Furthermore, optimized transformation parameters, including explant selection, infection conditions, and selection strategies, are comparatively discussed to highlight emerging trends in transformation efficiency. In spite of substantial progress, persistent challenges such as genotype dependency, limited transformation efficiency, low reproducibility, and regulatory constraints continue to hinder the large-scale application of transgenic soybean technologies. Henceforth, emerging strategies including gene stacking, genome editing, and advanced vector systems are discussed as promising approaches to overcome these limitations. Agrobacterium-mediated transformation is a valuable tool for functional genomics and soybean improvement. Its integration with genome-editing technologies, systems biology, and conventional breeding can accelerate the development of climate-resilient, nutritionally enhanced soybean cultivars.