In plants, many signalling molecules, such as phytohormones, miRNAs, transcription factors, and small signalling peptides, drive growth and development. However, very few small signalling peptides have been shown to be necessary for lateral root development. Here, we describe the role of the peptide RALFL34 during early events in lateral root development, and demonstrate its specific importance in orchestrating formative cell divisions in the pericycle. Our results further suggest that this small signalling peptide acts on the transcriptional cascade leading to a new lateral root upstream of GATA23, an important player in lateral root formation. In addition, we describe a role for ETHYLENE RESPONSE FACTORs (ERFs) in regulating RALFL34 expression. Taken together, we put forward RALFL34 as a new, important player in lateral root initiation.