SummaryAuxin is as an efficient initiator and regulator of cell fate during somatic embryogenesis (SE), but the molecular mechanisms and regulating networks of this process are not well understood. In this report, we analysed SE process induced by Leafy cotyledon1-like 1 (GhL1L1), a NF-YB subfamily gene specifically expressed in embryonic tissues in cotton. We also identified the target gene of GhL1L1, and its role in auxin distribution and cell fate specification during embryonic development was analysed. Overexpression of GhL1L1 accelerated embryonic cell formation, associated with an increased concentration of IAA in embryogenic calluses (ECs) and in the shoot apical meristem, corresponding to altered expression of the auxin transport gene GhPIN1. By contrast, GhL1L1-deficient explants showed retarded embryonic cell formation, and the concentration of IAA was decreased in GhL1L1-deficient ECs. Disruption of auxin distribution accelerated the specification of embryonic cell fate together with regulation of GhPIN1. Furthermore, we showed that PHOSPHATASE 2AA2 (GhPP2AA2) was activated by GhL1L1 through targeting the G-box of its promoter, hence regulating the activity of GhPIN1 protein.Our results indicate that GhL1L1 functions as a key regulator in auxin distribution to regulate cell fate specification in cotton and contribute to the understanding of the complex process of SE in plant species.