To study the mechanisms behind auxin-induced cell division, lateral root initiation was used as a model system. By means of microarray analysis, genome-wide transcriptional changes were monitored during the early steps of lateral root initiation. Inclusion of the dominant auxin signaling mutant solitary root1 (slr1) identified genes involved in lateral root initiation that act downstream of the auxin/indole-3-acetic acid (AUX/IAA) signaling pathway. Interestingly, key components of the cell cycle machinery were strongly defective in slr1, suggesting a direct link between AUX/IAA signaling and core cell cycle regulation. However, induction of the cell cycle in the mutant background by overexpression of the D-type cyclin (CYCD3;1) was able to trigger complete rounds of cell division in the pericycle that did not result in lateral root formation. Therefore, lateral root initiation can only take place when cell cycle activation is accompanied by cell fate respecification of pericycle cells. The microarray data also yielded evidence for the existence of both negative and positive feedback mechanisms that regulate auxin homeostasis and signal transduction in the pericycle, thereby fine-tuning the process of lateral root initiation.