Adventitious roots constitute the bulk of the fibrous root system in cereals. Compared with the current understanding of shoot development, knowledge of the molecular mechanisms of development of the adventitious roots of cereals is limited. We have isolated and characterized a novel gene controlling the initiation of adventitious root primordia in rice (Oryza sativa L.). The gene, designated Adventitious rootless1 (ARL1), encodes a protein with a LATERAL ORGAN BOUNDARIES (LOB) domain. It is expressed in lateral and adventitious root primordia, tiller primordia, vascular tissues, scutellum, and young pedicels. ARL1 is a nuclear protein and can form homodimers. ARL1 is an auxin- and ethylene-responsive gene, and the expression pattern of ARL1 in roots parallels auxin distribution. Our findings suggest that ARL1 is an auxin-responsive factor involved in auxin-mediated cell dedifferentiation, and that it promotes the initial cell division in the pericycle cells adjacent to the peripheral vascular cylinder in the stem.