The molecular mechanisms of de novo meristem formation, cell differentiation and the integration of the cell cycle machinery into appropriate stages of the developmental programmes are still largely unknown in plants. Legume root nodules, which house nitrogen-fixing rhizobia, are unique plant organs and their development may serve as a model for organogenetic processes in plants. Nodules form and are essential for the plant only under limitation of combined nitrogen in the soil. Moreover, their development is triggered by external mitogenic signals produced by their symbiotic partners, the rhizobia. These signals, the lipochitooligosaccharide Nod factors, act as host-specific morphogens and induce the re-entry of root cortical cells into mitotic cycles. Maintenance of cell division activity leads to the formation of a persistent nodule meristem from which cells exit continuously and enter the nodule differentiation programme, involving multiple cycles of endoreduplication and enlargement of nuclear and cell volumes. While the small diploid 2C cells remain uninfected, the large polyploid cells can be invaded and, after completing the differentiation programme, host the nitrogen-fixing bacteroids. This review summarizes the present knowledge on cell cycle reactivation and meristem formation in response to Nod factors and reports on a novel plant cell cycle regulator that can switch mitotic cycles to differentiation programmes.