One of the key events in dicot plant embryogenesis is the emergence of the two cotyledon primordia, which marks the transition from radial symmetry to bilateral symmetry. In Arabidopsis thaliana, the three CUP-SHAPED COTYLEDON (CUC) genes are responsible for determining the boundary region between the cotyledons. However, the mechanisms controlling their transcription activation are not well understood. Previous studies found that several WOX family homeobox transcription factors are involved in embryo apical patterning and cotyledon development. Here we show that WOX2 and STIMPY-LIKE (STPL/WOX8) act redundantly to differentially regulate the expression of the CUC genes in promoting the establishment of the cotyledon boundary, without affecting the primary shoot meristem. Loss of both WOX2 and STPL results in reduced CUC2 and CUC3 expression in one side of the embryo, but an expansion of the CUC1 domain. Furthermore, we found that STPL is expressed in the embryo proper, and its activation is enhanced by the removal of WOX2, providing an explanation for the functional redundancy between WOX2 and STPL. Additional evidence also showed that WOX2 and STPL function independently in regulating different aspects of local auxin gradient formation during early embryogenesis.