Summary In order to establish the biological function of the tobacco basic leucine zipper (bZIP) transcription factor BZI-1 in hormone signalling, we have analysed transgenic plants which were altered with respect to the protein level or the activation potential of BZI-1. Overexpression of a dominant-negative derivative of BZI-1, lacking the N-terminal activation domain, resulted in plants displaying reduced internode size, enhanced lateral shoot formation and small, curly leaves. The response to auxin monitored with reference to root organogenesis, epinastic leaf curvature and transcription of the auxin-induced GH3 gene was reduced. In vitro, BZI-1 specifically binds to ACGT elements (ACEs) present in the GH3 promoter. In vivo, binding to the GH3 promoter was confirmed by chromatin immunoprecipitation (ChIP). Overexpression of BZI-1 in transgenic plants did not lead to a significant activation of the GH3 target gene. In contrast, plants expressing a VP16 (Herpes simplex virion protein 16)-BZI-1 fusion protein showed enhanced auxin-induced GH3 transcription. However, VP16-BZI-1 is insufficient to trigger GH3 expression independently of the auxin stimulus. Whereas auxin responsiveness has been shown to be mediated by ARF (auxin response factor) transcription factors, we discuss a function of BZI-1 assisting in fine-tuning of auxin-induced transcription.