Plant organs are typically organized into three main tissue layers. The middle ground tissue layer comprises the majority of the plant body and serves a wide range of functions, including photosynthesis, selective nutrient uptake and storage, and gravity sensing. Ground tissue patterning and maintenance in Arabidopsis are controlled by a well-established gene network revolving around the key regulator SHORT-ROOT (SHR). In contrast, it is completely unknown how ground tissue identity is first specified from totipotent precursor cells in the embryo. The plant signaling molecule auxin, acting through AUXIN RESPONSE FACTOR (ARF) transcription factors, is critical for embryo patterning. The auxin effector ARF5/MONOPTEROS (MP) acts both cell-autonomously and noncell-autonomously to control embryonic vascular tissue formation and root initiation, respectively. Here we show that auxin response and ARF activity cell-autonomously control the asymmetric division of the first ground tissue cells. By identifying embryonic target genes, we show that MP transcriptionally initiates the ground tissue lineage and acts upstream of the regulatory network that controls ground tissue patterning and maintenance. Strikingly, whereas the SHR network depends on MP, this MP function is, at least in part, SHR independent. Our study therefore identifies auxin response as a regulator of ground tissue specification in the embryonic root, and reveals that ground tissue initiation and maintenance use different regulators and mechanisms. Moreover, our data provide a framework for the simultaneous formation of multiple cell types by the same transcriptional regulator.