A field experiment was conducted during wet season of 2010 at the research farm of the Indian Agricultural Research Institute, New Delhi to study the efficiency of new low dose herbicide penoxsulam on growth and development of rice, associated weeds and micro flora. Penoxsulam 24 SC at 25 g ha-1 applied at 10 DAS/DAT significantly reduced the weed population, increased growth, grain yield (4.86 t ha-1) and yield attributes of rice crop. Herbicidal treatments provided an yield advantage of 65.98% to 72.63%, respectively over weedy check. Herbicides exerted a significant detrimental effect on soil bacteria, fungi and actinomycetes. The soil microbes were more sensitive at 10 DAS/DAT to penoxsulam 25 g ha-1 and pre-mergence application pretilachlor @ 750 g ha^-1 as evident from significant reduction in their population, eventually microbial density started to recover slowly.