Probable transcription factor involved in the regulation of interfascicular fiber (cortical cells) and secondary xylem differentiation in the inflorescence stems. Required for lateral shoot meristems (LSMs) and flower meristems (FMs) initiation. May be involved in the determination of vascular patterning and organ polarity (PubMed:10559440, PubMed:11169198, PubMed:11402186, PubMed:15111711, PubMed:15598805, PubMed:7555701). Directly regulates the expression of AGO10, ZPR1, ZPR2, ZPR3 and ZPR4 (PubMed:22781836). Required to regulate adaxial-abaxial polarity and leaf axial patterning (PubMed:20807212). Homodimer (Probable). Heterodimer with ZPR1, ZPR2, ZPR3 or ZPR4 (PubMed:18055602). Interacts with ESR1 and ESR2 (PubMed:17376809). Interacts with ZPR1, ZPR2, ZPR3 and ZPR4 (PubMed:18055602, PubMed:18408069). Heterodimerization with ZPR3 prevents DNA binding by REV (PubMed:18055602). Expressed in the interfascicular regions of stem and vascular bundles of young roots and leaves. Expressed at the earliest stages and throughout LSM initiation and development. In embryo development, expressed at the heart stage until the 'walking stick' stage in the adaxial portion of the cotyledon primordia, the shoot apical meristem (SAM) and the vascular precursor cells of the hypocotyl and root. In developing flowers, expressed first at stage 1 in the center of L3 layer and then expands to the center of L2 and L1 layers. Expressed in the center of flower meristem through stages 4 and 5. At stage 6, expressed in the adaxial side of the carpel primordia and then on the adaxial carpel face. By auxin. Repressed by ZPR and miR165. Induced by DOF5.1 (PubMed:20807212). Plants display strongly reduced auxin polar transport in inflorescence stems and hypocotyls. This phenotype is probably due to altered cell differentiation and morphology (PubMed:11402186). Repression by miR165 suppresses DOF5.1 over-expression mediated upward-curling phenotype (PubMed:20807212). Belongs to the HD-ZIP homeobox family. Class III subfamily.