Amide-linked conjugates of indole-3-acetic acid (IAA) are putative storage or inactivation forms of the growth hormone auxin. Here, we describe the Arabidopsis iar3 mutant that displays reduced sensitivity to IAA-Ala. IAR3 is a member of a family of Arabidopsis genes related to the previously isolated ILR1 gene, which encodes an IAA-amino acid hydrolase selective for IAA-Leu and IAA-Phe. IAR3 and the very similar ILL5 gene are closely linked on chromosome 1 and comprise a subfamily of the six Arabidopsis IAA-conjugate hydrolases. The purified IAR3 enzyme hydrolyzes IAA-Ala in vitro. iar 3 ilr1 double mutants are more resistant than either single mutant to IAA-amino acid conjugates, and plants overexpressing IAR3 or ILR1 are more sensitive than is the wild type to certain IAA-amino acid conjugates, reflecting the overlapping substrate specificities of the corresponding enzymes. The IAR3 gene is expressed most strongly in roots, stems, and flowers, suggesting roles for IAA-conjugate hydrolysis in those tissues.