We have analyzed the development of leaf shape and vascular pattern in leaves mutant for ASYMMETRIC LEAVES1 (AS1) or AS2 and compared the timing of developmental landmarks to cellular response to auxin, as measured by expression of the DR5:beta-glucuronidase (GUS) transgene and to cell division, as measured by expression of the cycB1:GUS transgene. We found that the earliest visible defect in both as1 and as2 first leaves is the asymmetric placement of auxin response at the distal leaf tip. This precedes visible changes in leaf morphology, asymmetric placement of the distal margin gap, formation of margin gaps along the leaf border, asymmetric distribution of marginal auxin, and asymmetry in cell division patterns. Moreover, treatment of developing leaves with either exogenous auxin or an auxin transport inhibitor eliminates asymmetric auxin response and subsequent asymmetric leaf development. We propose that the initial asymmetric placement of auxin at the leaf tip gives rise to later asymmetries in the internal auxin sources, which subsequently result in asymmetrical cell differentiation and division patterns.