Dormancy is a bet-hedging strategy used by a wide range of taxa, including microorganisms. It refers to an organism's ability to enter a reversible state of low metabolic activity when faced with unfavourable environmental conditions. Dormant microorganisms generate a seed bank, which comprises individuals that are capable of being resuscitated following environmental change. In this Review, we highlight mechanisms that have evolved in microorganisms to allow them to successfully enter and exit a dormant state, and discuss the implications of microbial seed banks for evolutionary dynamics, population persistence, maintenance of biodiversity, and the stability of ecosystem processes.