To sustain a lifelong ability to initiate organs, plants retain pools of undifferentiated cells with a preserved proliferation capacity. The root pericycle represents a unique tissue with conditional meristematic activity, and its tight control determines initiation of lateral organs. Here we show that the meristematic activity of the pericycle is constrained by the interaction with the adjacent endodermis. Release of these restraints by elimination of endodermal cells by single-cell ablation triggers the pericycle to re-enter the cell cycle. We found that endodermis removal substitutes for the phytohormone auxin-dependent initiation of the pericycle meristematic activity. However, auxin is indispensable to steer the cell division plane orientation of new organ-defining divisions. We propose a dual, spatiotemporally distinct role for auxin during lateral root initiation. In the endodermis, auxin releases constraints arising from cell-to-cell interactions that compromise the pericycle meristematic activity, whereas, in the pericycle, auxin defines the orientation of the cell division plane to initiate lateral roots.