The recognition of a positive correlation between organism genome size with its transposable element (TE) content, represents a key discovery of the field of genome biology. Considerable evidence accumulated since then suggests the involvement of TEs in genome structure, evolution and function. The global genome reorganization brought about by transposon activity might play an adaptive/regulatory role in the host response to environmental challenges, reminiscent of McClintock’s original ’Controlling Element’ hypothesis. This regulatory aspect of TEs is also garnering support in light of the recent evidences which project TEs as distributed genomic control modules. According to this view, TEs are capable of actively reprogramming host genes circuits and ultimately fine-tuning the host response to specific environmental stimuli. Moreover, the stress-induced changes in epigenetic status of TE activity may allow TEs to propagate their stress responsive elements to host genes; the resulting genome fluidity can permit phenotypic plasticity and adaptation to stress. Given their predominating presence in the plant genomes, nested organization in the genic regions and potential regulatory role in stress response, TEs hold unexplored potential for crop improvement programs. This review intends to present the current information about the roles played by TEs in plant genome organization, evolution and function, and highlight the regulatory mechanisms in plant stress responses. We will also briefly discuss the connection between TE activity, host epigenetic response and phenotypic plasticity as a critical link for traversing the translational bridge from a purely basic study of TEs, to the applied field of stress adaptation and crop improvement.