TCP proteins belong to the plant-specific bHLH transcription factor family, and function as key regulators of diverse developmental processes. Functional redundancy amongst family members and post-transcriptional down-regulation by miRJAW of several TCP genes complicate their functional characterization. Here, we explore the role of TCP3 by analyzing transgenic plants expressing miRJAW-resistant mTCP3 and dominant-negative TCP3SRDX. Seedlings and seeds of mTCP3 plants were found to hyper-accumulate flavonols, anthocyanins and proanthocyanidins, whereas levels of proanthocyanidins were slightly reduced in TCP3SRDX plants. R2R3-MYB proteins control not only early flavonoid biosynthetic steps but also activate late flavonoid biosynthetic genes by forming ternary R2R3-MYB/bHLH/WD40 (MBW) complexes. TCP3 interacted in yeast with R2R3-MYB proteins, which was further confirmed in planta using BiFC experiments. Yeast three-hybrid assays revealed that TCP3 significantly strengthened the transcriptional activation capacity of R2R3-MYBs bound by the bHLH protein TT8. Transcriptome analysis of mTCP3 and TCP3SRDX plants supported a role for TCP3 in enhancing flavonoid biosynthesis. Moreover, several auxin-related developmental abnormalities were observed in mTCP3 plants. Transcriptome data coupled with studies of an auxin response reporter and auxin efflux carriers showed that TCP3 negatively modulates the auxin response, probably by compromising auxin transport capacity. Genetic experiments revealed that the chalcone synthase mutant tt4-11 lacking flavonoid biosynthesis abrogated the auxin-related defects caused by mTCP3. Together, these data suggest that TCP3 interactions with R2R3-MYBs lead to enhanced flavonoid production, which further negatively modulates the auxin response.