Lateral root branching is a genetically defined and environmentally regulated process. Auxin is required for lateral root formation, and mutants that are altered in auxin synthesis, transport or signaling often have lateral root defects. Crosstalk between auxin and ethylene in root elongation has been demonstrated, but interactions between these hormones in the regulation of Arabidopsis lateral root formation are not well characterized. This study utilized Arabidopsis mutants altered in ethylene signaling and synthesis to explore the role of ethylene in lateral root formation. We find that enhanced ethylene synthesis or signaling, through the eto1-1 and ctr1-1 mutations, or through the application of 1-aminocyclopropane-1-carboxylic acid (ACC), negatively impacts lateral root formation, and is reversible by treatment with the ethylene antagonist, silver nitrate. In contrast, mutations that block ethylene responses, etr1-3 and ein2-5, enhance root formation and render it insensitive to the effect of ACC, even though these mutants have reduced root elongation at high ACC doses. ACC treatments or the eto1-1 mutation significantly enhance radiolabeled indole-3-acetic acid (IAA) transport in both the acropetal and the basipetal directions. ein2-5 and etr1-3 have less acropetal IAA transport, and transport is no longer regulated by ACC. DR5-GUS reporter expression is also altered by ACC treatment, which is consistent with transport differences. The aux1-7 mutant, which has a defect in an IAA influx protein, is insensitive to the ethylene inhibition of root formation. aux1-7 also has ACC-insensitive acropetal and basipetal IAA transport, as well as altered DR5-GUS expression, which is consistent with ethylene altering AUX1-mediated IAA uptake, and thereby blocking lateral root formation.