Plant growth and development of new organs depend on the continuous activity of the meristems. In the shoot, patterns of organ initiation are determined by PINFORMED (PIN)-dependent auxin distribution, while the undifferentiated state of meristem cells requires activity of KNOTTED LIKE HOMEOBOX (KNOX) transcription factors. Cell proliferation and differentiation of the root meristem are regulated by the largely antagonistic functions of auxin and cytokinins. It has previously been shown that the transcription factor JAGGED LATERAL ORGANS (JLO), a member of the LATERAL ORGAN BOUNDARY DOMAIN (LBD) family, coordinates KNOX and PIN expression in the shoot and promotes root meristem growth. Here we show that JLO is required for the establishment of the root stem cell niche, where it interacts with the auxin/PLETHORA pathway. Auxin signaling involves the AUX/IAA co-repressor proteins, ARF transcription factors and F-box receptors of the TIR1/AFB1-5 family. Because jlo mutants fail to degrade the AUX/IAA protein BODENLOS, root meristem development is inhibited. We also demonstrate that the expression levels of two auxin receptors, TIR1 and AFB1, are controlled by JLO dosage, and that the shoot and root defects of jlo mutants are alleviated in jlo plants expressing TIR1 and AFB1 from a transgene. The finding that the auxin sensitivity of a plant can be differentially regulated through control of auxin receptor expression can explain how different developmental processes can be integrated by the activity of a key transcription factor.