Initiation of symbiotic nodules in legumes requires cytokinin signaling, but its mechanism of action is largely unknown. Here, we tested whether the failure to initiate nodules in the Medicago truncatula cytokinin perception mutant cre1 (cytokinin response1) is due to its altered ability to regulate auxin transport, auxin accumulation, and induction of flavonoids. We found that in the cre1 mutant, symbiotic rhizobia cannot locally alter acro-and basipetal auxin transport during nodule initiation and that these mutants show reduced auxin (indole-3-acetic acid) accumulation and auxin responses compared with the wild type. Quantification of flavonoids, which can act as endogenous auxin transport inhibitors, showed a deficiency in the induction of free naringenin, isoliquiritigenin, quercetin, and hesperetin in cre1 roots compared with wild-type roots 24 h after inoculation with rhizobia. Coinoculation of roots with rhizobia and the flavonoids naringenin, isoliquiritigenin, and kaempferol, or with the synthetic auxin transport inhibitor 2,3,5,-triiodobenzoic acid, rescued nodulation efficiency in cre1 mutants and allowed auxin transport control in response to rhizobia. Our results suggest that CRE1-dependent cytokinin signaling leads to nodule initiation through the regulation of flavonoid accumulation required for local alteration of polar auxin transport and subsequent auxin accumulation in cortical cells during the early stages of nodulation.