The allelopathic potency of rye (Secale cereale L.) is due mainly to the presence of phytotoxic benzoxazinones—compounds whose biosynthesis is developmentally regulated, with the highest accumulation in young tissue and a dependency on cultivar and environmental influences. Benzoxazinones can be released from residues of greenhouse-grown rye at levels between 12 and 20 kg/ha, with lower amounts exuded by living plants. In soil, benzoxazinones are subject to a cascade of transformation reactions, and levels in the range 0.5–5 kg/ha have been reported. Starting with the accumulation of less toxic benzoxazolinones, the transformation reactions in soil primarily lead to the production of phenoxazinones, acetamides, and malonamic acids. These reactions are associated with microbial activity in the soil. In addition to benzoxazinones, benzoxazolin-2(3H)-one (BOA) has been investigated for phytotoxic effects in weeds and crops. Exposure to BOA affects transcriptome, proteome, and metabolome patterns of the seedlings, inhibits germination and growth, and can induce death of sensitive species. Differences in the sensitivity of cultivars and ecotypes are due to different species-dependent strategies that have evolved to cope with BOA. These strategies include the rapid activation of detoxification reactions and extrusion of detoxified compounds. In contrast to sensitive ecotypes, tolerant ecotypes are less affected by exposure to BOA. Like the original compounds BOA and MBOA, all exuded detoxification products are converted to phenoxazinones, which can be degraded by several specialized fungi via the Fenton reaction. Because of their selectivity, specific activity, and presumably limited persistence in the soil, benzoxazinoids or rye residues are suitable means for weed control. In fact, rye is one of the best cool season cover crops and widely used because of its excellent weed suppressive potential. Breeding of benzoxazinoid resistant crops and of rye with high benzoxazinoid contents, as well as a better understanding of the soil persistence of phenoxazinones, of the weed resistance against benzoxazinoids, and of how allelopathic interactions are influenced by cultural practices, would provide the means to include allelopathic rye varieties in organic cropping systems for weed control.