Horizontal gene transfer (HGT) drives microbial adaptation but is often under the control of mobile genetic elements (MGEs) whose interests are not necessarily aligned with those of their hosts. In general, transfer is costly to the donor cell while potentially beneficial to the recipients. The diversity and plasticity of cell–MGEs interactions, and those among MGEs, result in complex evolutionary processes where the source, or even the existence of selection for maintaining a function in the genome, is often unclear. For example, MGE-driven HGT depends on cell envelope structures and defense systems, but many of these are transferred by MGEs themselves. MGEs can spur periods of intense gene transfer by increasing their own rates of horizontal transmission upon communicating, eavesdropping, or sensing the environment and the host physiology. This may result in high-frequency transfer of host genes unrelated to the MGE. Here, we review how MGEs drive HGT and how their transfer mechanisms, selective pressures and genomic traits affect gene flow, and therefore adaptation, in microbial populations. The encoding of many adaptive niche-defining microbial traits in MGEs means that intragenomic conflicts and alliances between cells and their MGEs are key to microbial functional diversification. This article is part of a discussion meeting issue ‘Genomic population structures of microbial pathogens’.