In Arabidopsis thaliana, auxin is a key regulator of tissue patterning in the developing embryo. We have identified a group of proteins that act downstream of auxin accumulation in auxin-mediated root and vascular development in the embryo. Combined mutations in OBERON1 (OBE1) and OBERON2 (OBE2) give rise to obe1 obe2 double mutant seedlings that closely phenocopy the monopteros (mp) mutant phenotype, with an absence of roots and defective development of the vasculature. We show that, in contrast to the situation in mp mutants, obe1 obe2 double mutant embryos show auxin maxima at the root pole and in the provascular region, and that the SCF(TIR1) pathway, which translates auxin accumulation into transcriptional activation of auxin-responsive genes, remains intact. Although we focus on the impact of obe mutations on aspects of embryo development, the effect of such mutations on a broad range of auxin-related gene expression and the tissue expression patterns of OBE genes in seedlings suggest that OBE proteins have a wider role to play in growth and development. We suggest that OBE1 and OBE2 most likely control the transcription of genes required for auxin responses through the action of their PHD finger domains.