Peptidomics is a challenging field in which to create a link between genomic information and biological function through biochemical analysis of expressed peptides, including precise identification of post-translational modifications and proteolytic processing. We found that secreted peptides in Arabidopsis plants diffuse into the medium of whole-plant submerged cultures, and can be effectively identified by o-chlorophenol extraction followed by LC-MS analysis. Using this system, we first confirmed that a 12-amino-acid mature CLE44 peptide accumulated at a considerable level in the culture medium of transgenic plants overexpressing CLE44. Next, using an in silico approach, we identified a novel gene family encoding small secreted peptides that exhibit significant sequence similarity within the C-terminal short conserved domain. We determined that the mature peptide encoded by At1g47485, a member of this gene family, is a 15-amino-acid peptide containing two hydroxyproline residues derived from the conserved domain. This peptide, which we have named CEP1, is mainly expressed in the lateral root primordia and, when overexpressed or externally applied, significantly arrests root growth. CEP1 is a candidate for a novel peptide plant hormone.