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The expression of the auxin responsive reporter construct, GH3:gusA, was examined in transgenic white clover plants to assess changes in the auxin balance during the earliest stages of root nodule formation. Reporter gene expression was monitored at marked locations after the application of bacteria or signal molecules using two precise inoculation techniques: spot-inoculation and a novel method for ballistic microtargeting. Changes in GH3:gusA expression were monitored after the inoculation of Rhizobium leguminosarum biovar trifolii, non-host rhizobia, lipo-chitin oligosaccharides (LCOs), chitin oligosaccharides, a synthetic auxin transport inhibitor (naphthylphthalamic acid; NPA), auxin, the ENOD40-1 peptide or different flavonoids. The results show that clover-nodulating rhizobia induce a rapid, transient and local downregulation of GH3:gusA expression during nodule initiation followed by an upregulation of reporter gene expression at the site of nodule initiation. Microtargeting of auxin caused a local and acropetal upregulation of GH3:gusA expression, whereas NPA caused local and acropetal downregulation of expression. Both spot-inoculation and microtargeting of R. I. bv. trifolii LCOs or flavonoid aglycones induced similar changes to GH3:gusA expression as NPA. O-acetylated chitin oligosaccharides caused similar changes to GH3:gusA expression as R. I. bv. trifolii spot-inoculation, but only after delivery by microtargeting. Non-O-acetylated chitin oligosaccharides, flavonoid glucosides or the ENOD40-1 peptide failed to induce any detectable changes in GH3:gusA expression. GH3:gusA expression patterns during the later stages of nodule and lateral root development were similar. These results support the hypothesis that LCOs and chitin oligosaccharides act by perturbing the auxin flow in the root during the earliest stages of nodule formation, and that endogenous flavonoids could mediate this response.