Auxin and cytokinins have been identified as key regulators of plant development. Recently, these phytohormones have been shown to interact during important developmental processes, including positioning, identity acquisition and maintenance of meristem organizing centres, regulation of balance between cell division and differentiation, and postembryonic de novo organogenesis. Here, we discuss recent advances in our understanding of the underlying molecular mechanisms at the levels of regulating metabolism, signalling, gene expression and protein stability.