Lateral root base nodulation on the tropical, semiaquatic legume Sesbania rostrata results from two coordinated, Nod factor-dependent processes: formation of intercellular infection pockets and induction of cell division. Infection pocket formation is associated with cell death and production of hydrogen peroxide. Pharmacological experiments showed that ethylene and reactive oxygen species mediate Nod factor responses and are required for nodule initiation, whereby induction of division and infection could not be uncoupled. Application of purified Nod factors triggered cell division, and both Nod factors and ethylene induced cavities and cell death features in the root cortex. Thus, in S. rostrata, ethylene and reactive oxygen species act downstream from the Nod factors in pathways that lead to formation of infection pockets and initiation of nodule primordia.