Somatic embryogenesis is an important experimental model for studying cellular and molecular mechanisms of early embryo development. Although it has long been known that removal of exogenous auxin from medium results in somatic embryogenesis, the mechanisms underlying the initiation of somatic embryos (SEs) are poorly understood. In this study, we showed that YUCCAs (YUCs) encoding key enzymes in auxin biosynthesis are required for SE induction in Arabidopsis. To identify other factors mediating SE initiation, we performed transcriptional profiling and gene expression analysis. The results showed that genes involved in ethylene biosynthesis and its responses were down-regulated during SE initiation. Ethylene level decreased progressively during SE initiation, whereas treatment with the metabolic precursor of ethylene, 1-aminocyclopropane-1-carboxylic acid (ACC), or mutation of ETHYLENE-OVERPRODUCTION1 (ETO1) disrupted SE induction, suggesting that ethylene plays a role in this process. Suppression of SE induction was also observed in the constitutive triple response 1 (ctr1) mutant, in which ethylene signaling was enhanced. These results indicate that down-regulation of not only ethylene biosynthesis, but also ethylene response is critical for SE induction. We further showed that ethylene disturbed SE initiation through inhibiting YUC expression that might be involved in local auxin biosynthesis and subsequent auxin distribution. Our results provide new information on the mechanisms of hormone-regulated SE initiation.