Most of Aux/IAA genes are rapidly induced by auxin. The Aux/IAA proteins are short-lived nuclear proteins sharing the four conserved domains. Domain II is critical for rapid degradation of Aux/IAA proteins. Among these gene family members, IAA1 is one of the earliest auxin-inducible genes. We used a steroid hormone-inducible system to reveal putative roles and downstream signaling of IAA1 in auxin response. Arabidopsis transgenic plants were generated expressing fusion protein of IAA1 (IAA1-GR) or IAA1 with a mutation in domain II (iaa1-GR) and the glucocorticoid hormone-binding domain (GR). IAA1-GR transgenic plants did not exhibit any discernable phenotypic differences by DEX treatment that allows nuclear translocation of the fusion protein. In contrast, diverse auxin-related physiological processes including gravitropism and phototropism were impaired by DEX treatment in roots, hypocotyls, stems, and leaves in iaa1-GR transgenic plants. Auxin induction of seven Aux/IAA mRNAs including IAA1 itself was repressed by DEX treatment, suggesting that IAA1 functions in the nucleus by mediating auxin response and might act as a negative feedback regulator for the expression of Aux/IAA genes including IAA1 itself. Auxin induction of Aux/IAA genes in the presence of cycloheximide can be repressed by DEX treatment, showing that the repression of transcription of the Aux/IAAs by the iaa1 mutant protein is primary. Wild-type IAA1-GR could not suppress auxin induction of IAA1 and IAA2. These results indicate that inhibition of auxin-activated transcription of Aux/IAA genes by the iaa1 mutant protein might be responsible for alteration of various auxin responses.