Phages are viruses that infect bacteria. They affect various microbe-mediated processes that drive biogeochemical cycling on a global scale. Their influence depends on whether the infection is lysogenic or lytic. Temperate phages have the potential to execute both infection types and thus frequently switch their infection modes in nature, potentially causing substantial impacts on the host-phage community and relevant biogeochemical cycling. Understanding the regulating factors and outcomes of temperate phage life cycle transition is thus fundamental for evaluating their ecological impacts. This review thus systematically summarizes the effects of various factors affecting temperate phage life cycle decisions in both culturable phage-host systems and natural environments. The review further elucidates the ecological implications of the life cycle transition of temperate phages with an emphasis on phage/host fitness, host-phage dynamics, microbe diversity and evolution, and biogeochemical cycles.