The plant signalling molecule auxin provides positional information in a variety of developmental processes by means of its differential distribution (gradients) within plant tissues. Thus, cellular auxin levels often determine the developmental output of auxin signalling. Conceptually, transmembrane transport and metabolic processes regulate the steady-state levels of auxin in any given cell. In particular, PIN auxin-efflux-carrier-mediated, directional transport between cells is crucial for generating auxin gradients. Here we show that Arabidopsis thaliana PIN5, an atypical member of the PIN gene family, encodes a functional auxin transporter that is required for auxin-mediated development. PIN5 does not have a direct role in cell-to-cell transport but regulates intracellular auxin homeostasis and metabolism. PIN5 localizes, unlike other characterized plasma membrane PIN proteins, to endoplasmic reticulum (ER), presumably mediating auxin flow from the cytosol to the lumen of the ER. The ER localization of other PIN5-like transporters (including the moss PIN) indicates that the diversification of PIN protein functions in mediating auxin homeostasis at the ER, and cell-to-cell auxin transport at the plasma membrane, represent an ancient event during the evolution of land plants.