The rhizosheath, the layer of soil tightly attached to the roots, protects plants against abiotic stress and other adverse conditions by providing a bridge from the plant root system to the soil. It reduces the formation of air gaps between the root and soil and facilitates the transportation of water at the root–soil interface. It also serves as a favourable niche for plant-growth-promoting rhizobacteria in the surrounding soil, which facilitate the absorption of soil water and nutrients. This review compares the difference between the rhizosheath and rhizosphere, and summarises the molecular and physiological mechanisms of rhizosheath formation, and identifying the causes of rhizosheath formation/non-formation in plants. We summarise the chemical and physical factors (root hair, soil-related factors, root exudates, and microorganisms) that determine rhizosheath formation, and focus on the important functions of the rhizosheath in plants under abiotic stress, especially in drought stress, phosphorus deficiency, aluminium stress, and salinity stress. Understanding the roles played by the rhizosheath and the mechanisms of its formation provides new perspectives for improving plant stress tolerance in the field, which will mitigate the increasing environmental stress conditions associated with on-going global climate change.