A major aspect of postembryonic plant development is the formation of secondary axes of growth: vegetative branches, inflorescence branches, or flowers. The first step in side-shoot development is the establishment of lateral meristems in the axils of leaves. GRAS-, MYB-, and bHLH-type transcription factors act as key regulators of early steps in this process. The REVOLUTA subfamily of HD-ZIP transcription factors controls the organization of lateral meristems. Whereas the development of lateral meristems into lateral buds is only poorly understood, recent studies have provided new insights into the regulation of lateral bud outgrowth. The MORE AXILLARY GROWTH (MAX) genes of Arabidopsis and the RAMOSUS (RMS) genes of pea are involved in the production, perception, and transduction of a signal that inhibits lateral bud outgrowth. Synthesis of this not-yet-identified hormone is positively regulated by the main shoot tip through auxin signalling.