Nitrogen-fixing root nodules are plant organs specialised for symbiotic transfer of nitrogen and carbon between microsymbiont and host. The organisation of nitrogen assimilation, storage and transport processes is partitioned at the subcellular and tissue levels, in distinctive patterns depending on the symbiotic partners. In this review, recent advances in understanding of actinorhizal nodule nitrogen assimilation are presented. New findings indicate that Frankia within nodules of Datisca glomerata (Presl.) Baill. carries out both primary nitrogen assimilation and biosynthesis of arginine, rather than exporting ammonium. Arginine is a typical storage form of nitrogen in plant tissues, but is a novel nitrogen carrier molecule in root nodule symbioses. Thus Frankia within D. glomerata nodules exhibits considerable metabolic independence. Furthermore, nitrogen reassimilation is likely to take place in the host in the uninfected nodule cortical cells of this root nodule symbiosis, before amino acid export to host sink tissues via the xylem. The role of an augmented pericycle in carbon and nitrogen exchange in root nodules deserves further attention in actinorhizal symbiosis, and further highlights the importance of a comprehensive, structure–function approach to understanding function in root nodules. Moreover, the multiple patterns of compartmentalisation in relation to nitrogen flux within root nodules demonstrate the diversity of possible functional interactions between host and microsymbiont that have evolved in the nitrogen-fixing clade.