AUXIN BINDING PROTEIN1 (ABP1) has long been characterized as a potentially important mediator of auxin action in plants. Analysis of the functional requirement for ABP1 during development was hampered because of embryo lethality of the null mutant in Arabidopsis thaliana. Here, we used conditional repression of ABP1 to investigate its function during vegetative shoot development. Using an inducible cellular immunization approach and an inducible antisense construct, we showed that decreased ABP1 activity leads to a severe retardation of leaf growth involving an alteration in cell division frequency, an altered pattern of endocycle induction, a decrease in cell expansion, and a change in expression of early auxin responsive genes. In addition, local repression of ABP1 activity in the shoot apical meristem revealed an additional role for ABP1 in cell plate formation and cell shape. Moreover, cells at the site of presumptive leaf initiation were more sensitive to ABP1 repression than other regions of the meristem. This spatial context-dependent response of the meristem to ABP1 inactivation and the other data presented here are consistent with a model in which ABP1 acts as a coordinator of cell division and expansion, with local auxin levels influencing ABP1 effectiveness.