DORNROSCHEN (DRN), which encodes a member of the AP2-type transcription factor family, contributes to auxin transport and perception in the Arabidopsis embryo. Live imaging performed with transcriptional or translational GFP fusions shows DRN to be activated in the apical cell after the first zygotic division, to act cell-autonomously and to be expressed in single cells extending laterally from the apical shoot stem-cell zone at the position of incipient leaf primordia. Here, we show that the Auxin response factor (ARF) MONOPTEROS (MP) directly controls DRN transcription in the tips of the embryonic cotyledons, which depends on the presence of canonical Auxin response elements (AuxREs), potential ARF-binding sites flanking the DRN transcription unit. Chromatin immunoprecipitation experiments show that MP binds in vivo to two AuxRE-spanning fragments in the DRN promoter, and that MP is required for expression of DRN in cotyledon tips. Hence, DRN represents a direct target of MP and functions downstream of MP in cotyledon development.