The Arabidopsis genome encodes ten Homeodomain-Leucine zipper (HD-Zip) II proteins. ARABIDOPSIS THALIANA HOMEOBOX 2 (ATHB2), HOMEOBOX ARABIDOPSIS THALIANA 1 (HAT1), HAT2, HAT3 and ATHB4 are regulated by changes in the red/far red light ratio that induce shade avoidance in most of the angiosperms. Here, we show that progressive loss of HAT3, ATHB4 and ATHB2 activity causes developmental defects from embryogenesis onwards in white light. Cotyledon development and number are altered in hat3 athb4 embryos, and these defects correlate with changes in auxin distribution and response. athb2 gain-of-function mutation and ATHB2 expression driven by its promoter in hat3 athb4 result in significant attenuation of phenotypes, thus demonstrating that ATHB2 is functionally redundant to HAT3 and ATHB4. In analogy to loss-of-function mutations in HD-Zip III genes, loss of HAT3 and ATHB4 results in organ polarity defects, whereas triple hat3 athb4 athb2 mutants develop one or two radialized cotyledons and lack an active shoot apical meristem (SAM). Consistent with overlapping expression pattern of HD-Zip II and HD-Zip III gene family members, bilateral symmetry and SAM defects are enhanced when hat3 athb4 is combined with mutations in PHABULOSA (PHB), PHAVOLUTA (PHV) or REVOLUTA (REV). Finally, we show that ATHB2 is part of a complex regulatory circuit directly involving both HD-Zip II and HD-Zip III proteins. Taken together, our study provides evidence that a genetic system consisting of HD-Zip II and HD-Zip III genes cooperates in establishing bilateral symmetry and patterning along the adaxial-abaxial axis in the embryo as well as in controlling SAM activity.