Auxin response factors (ARFs) are a family of transcription factors that are responsible for regulating gene expression in response to changes in auxin level. The analysis of ARF sequence and activity indicates that there are 2 major groups: activators and repressors. One clade of ARFs, clade-D, is sister to clade-A activating ARFs, but are unique in that they lack a DNA-binding domain. Clade-D ARFs are present in lycophytes and bryophytes but absent in other plant lineages. The transcriptional activity of clade-D ARFs, as well as how they regulate gene expression, is not well understood. Here, we report that clade-D ARFs are transcriptional activators in the model bryophytePhyscomitrium patensand have a major role in the development of this species.Δarfddubprotonemata exhibit a delay in filament branching, as well as a delay in the chloronema to caulonema transition. Additionally, leafy gametophore development inΔarfddublines lags behind wild type. We present evidence that ARFd1 interacts with activating ARFs via their PB1 domains, but not with repressing ARFs. Based on these results, we propose a model in which clade-D ARFs enhance gene expression by interacting with DNA bound clade-A ARFs. Further, we show that ARFd1 must form oligomers for full activity.