Updated project metadata. Root architecture is vital for plant growth and largely depends on primary root growth and lateral root development. Several plant hormones have been shown to affect root architecture among which auxin has been granted a central role. Lately, small signalling peptides also emerged as potential molecular components regulating root growth and development. Here, we identified C-TERMINALLY ENCODED PEPTIDE 5 (CEP5) as a novel, phloem poleexpressed paracrine signal for lateral root initiation. Our genetic, biochemical and pharmacological results show that CEP5 counteracts auxin signalling by stabilizing AUXIN/INDOLE ACETIC ACID (AUX/IAA) transcriptional repressors, suggesting the existence of an additional control mechanism through which plants can attenuate auxin signalling in a developmental context. Reducing CEP5 expression levels resulted in an increased auxin response and subsequently interfered with the normal progression through lateral root developmental stages.