The virulence of the bacterium Pantoea agglomerans pv. gypsophilae (Pag) on Gypsophila paniculata depends on a type III secretion system (T3SS) and its effectors. The hypothesis that plant-derived indole-3-acetic acid (IAA) plays a major role in gall formation was examined by disrupting basipetal polar auxin transport with the specific inhibitors 2,3,5-triiodobenzoic acid (TIBA) and N-1-naphthylphthalamic acid (NPA). On inoculation with Pag, galls developed in gypsophila stems above but not below lanolin rings containing TIBA or NPA, whereas, in controls, galls developed above and below the rings. In contrast, TIBA and NPA could not inhibit tumour formation in tomato caused by Agrobacterium tumefaciens. The colonization of gypsophila stems by Pag was reduced below, but not above, the lanolin–TIBA ring. Following Pag inoculation and TIBA treatment, the expression of hrpL (a T3SS regulator) and pagR (a quorum-sensing transcriptional regulator) decreased four-fold and that of pthG (a T3SS effector) two-fold after 24 h. Expression of PIN2 (a putative auxin efflux carrier) increased 35-fold, 24 h after Pag inoculation. However, inoculation with a mutant in the T3SS effector pthG reduced the expression of PIN2 by two-fold compared with wild-type infection. The results suggest that pthG might govern the elevation of PIN2 expression during infection, and that polar auxin transport-derived IAA is essential for gall initiation.