Mutation of phytoglobin 2 (Pgb2) increases the number of somatic embryos in Arabidopsis. To assess the effects of the cellular localization of Pgb2 on embryo formation, an inducible system expressing a fusion protein consisting of Pgb2 linked to the steroid-binding domain of the rat glucocorticoid receptor (GR) was introduced in apgb2mutant line lacking the ability to expressPgb2. In this transgenic system, Pgb2 remains in the cytoplasm but migrates into the nucleus upon exposure to dexamethasone (DEX). Pgb2 retention in the cytoplasm, in the absence of DEX, increased the number of somatic embryos and reduced the expression ofMYC2- an inhibitor of the synthesis of auxin, which is the inductive signal for embryogenesis. Removal of DEX also induced the expression of several genes involved in the biosynthesis of tryptophan and the auxin, indole-3-acetic acid (IAA). These genes included:tryptophan synthase-αsubunit(TSA1) andtryptophan synthase-βsubunit(TSB1), which are involved in the synthesis of tryptophan,cytochrome P450 CYP79B2(CYP79B2) andamidase 1(AMI1), which participate in the formation of IAA via indole-3-acetaldoxime, and several members of theYUCCAfamily, includingYUC1and4, which are also required for IAA synthesis. Retention of Pgb2 in the cytoplasm by removal of DEX increased the staining pattern of IAA along the cotyledons of the explants generating embryogenic tissue. Staining for IAA decreased when Pgb2 translocated into the nucleus in response to the application of DEX. Collectively, these results suggest that the presence of Pgb2 in the cytoplasm, but not in the nucleus, phenocopies the effects ofPgb2mutation in inducing somatic embryogenesis.