Lateral root(LR)formation in most vascular plants is initiated by asymmetric division of founder cells, followed by coordinated cell proliferation and differentiation for patterning new primordia. The sequential developmental processes of LR formation are triggered by a localized auxin response. In Arabidopsis, LATERAL ORGAN BOUNDARIES‐DOMAIN 16 (LBD16), an auxin‐inducible transcription factor, is one of the key regulators linking auxin response in LR founder cells to LR initiation. This review summarizes recent findings on LR formation, focusing on the molecular mechanisms of auxin/LBD16-regulated LR initiation and lateral inhibition of LR founder cell formation.