Novel genes that function in the conversion of indole-3-acetamide (IAM) into indole-3-acetic acid (IAA), which were previously thought to exist only in the bacterial genome, have been isolated from plants. The finding of the AtAMI1 gene in Arabidopsis thaliana and the NtAMI1 gene in Nicotiana tabacum, which encode indole-3-acetamide hydrolase, indicates the existence of a new pathway for auxin biosynthesis in plants. This review summarizes the characteristics of these genes involved in auxin biosynthesis and discusses the possibility of the AMI1 gene family being widely distributed in the plant kingdom. Its evolutionary relationship to bacterial indole-3-acetamide hydrolase, based on phylogenetic analyses, is also discussed.