When the root systems of many plant species are exposed to a localized source of nitrate (NO3- they respond by proliferating their lateral roots to colonize the nutrient-rich zone. This study reviews recent work with Arabidopsis thaliana in which molecular genetic approaches are being used to try to understand the physiological and genetic basis for this response. These studies have led to the conclusion that there are two distinct pathways by which NO3- modulates root branching in Arabidopsis. On the one hand, meristematic activity in lateral root tips is stimulated by direct contact with an enriched source of NO3- (the localized stimulatory effect). On the other, a critical stage in the development of the lateral root (just after its emergence from the primary root) is highly susceptible to inhibition by a systemic signal that is related to the amount of NO3- absorbed by the plant (the systemic inhibitory effect). Evidence has been obtained that the localized stimulatory effect is a direct effect of the NO3- ion itself rather than a nutritional effect. A NO3(-)-inducible MADS-box gene (ANR1) has been identified which encodes a component of the signal transduction pathway linking the external NO3- supply to the increased rate of lateral root elongation. Experiments using auxin-resistant mutants have provided evidence for an overlap between the auxin and NO3- response pathways in the control of lateral root elongation. The systemic inhibitory effect, which does not affect lateral root initiation but delays the activation of the lateral root meristem, appears to be positively correlated with the N status of the plant and is postulated to involve a phloem-mediated signal from the shoot.