To ensure successful plant reproduction and crop production, the spatial and temporal control of the termination of the floral meristem must be coordinated. In Arabidopsis, the timing of this termination is determined by AGAMOUS (AG). Following its termination, the floral meristem underdoes gynoecium formation. A direct target of AG, CRABS CLAW (CRC), is involved in both floral meristem determinacy and gynoecium development. However, how floral meristem termination is coordinated with gynoecium formation is not understood. Here, we identify a mechanistic link between floral meristem termination and gynoecium development through fine-tuning of auxin homeostasis by CRC. CRC controls auxin homeostasis in the medial region of the developing gynoecium to generate proper auxin maxima. This regulation partially occurs via direct transcriptional repression of TORNADO2 (TRN2) by CRC. Plasma membrane-localized TRN2 modulates auxin homeostasis. We propose a model describing how regulation of auxin homeostasis mediates the transition from floral meristem termination to gynoecium development.