The xylem and phloem, major conducting and supporting tissues in vascular plants, are established by cell division and cell-type specification in the procambium/cambium. The organization of the xylem, phloem, and procambium/cambium is tightly controlled. However, the underlying regulatory mechanisms remain largely unknown. In this study, we report the discovery of two transcription factors, AT-HOOK MOTIF NUCLEAR LOCALIZED PROTEIN 3 (AHL3) and AHL4, which regulate vascular tissue boundaries in Arabidopsis thaliana roots. In either of the knockout mutants of AHL3 and AHL4, encoding closely related AT-hook transcription factors, a misspecification of tissue boundaries between the xylem and procambium occurred and ectopic xylem developed in the procambium domain. In plants, specific types of transcription factors can serve as direct intercellular signals by moving from one cell to another, playing crucial roles in tissue patterning. Adding to this paradigm, AHL4 moves actively from the procambium to xylem in the root meristem to regulate the tissue boundaries. When the intercellular movement of AHL4 was impaired, AHL4 could not complement the xylem phenotype in the ahl4. Furthermore, AHL4 revealed unique characteristics in that it interacts with AHL3 in vivo and that this interaction facilitates their intercellular trafficking. Taken together, this study uncovered a novel mechanism in vascular tissue patterning that requires the intercellular trafficking of two interacting transcription factors.