De novo shoot organogenesis is a prerequisite for numerous applications in plant research and breeding but is often a limiting factor, for example, in genome editing approaches. HD-ZIP III transcription factors have been characterized as crucial regulators of shoot specification, however up-stream components controlling their activity during shoot regeneration are only partially identified. In a chemical genetic screen, we isolated ZIC2, a novel activator of HD-ZIP III activity. Using molecular, physiological and hormone transport analyses in Arabidopsis and sunflower (Helianthus annuus), we examined the molecular mechanism by which the drug promotes HD-ZIP III expression. ZIC2-dependent upregulation of HD-ZIP III transcription promotes shoot regeneration in Arabidopsis and is accompanied by the induction of shoot specifying factors WUS and RAP2.6L and a subset of cytokinin biosynthesis enzymes. ZIC2's effect on HD-ZIP III expression and regeneration is based on its ability to limit polar auxin transport. We further provide evidence that chemical modulation of auxin efflux can enhance de novo shoot formation in the regeneration recalcitrant species sunflower. Activation of HD-ZIP III transcription during shoot regeneration depends on the local distribution of auxin and chemical modulation of auxin transport can be used to overcome poor shoot organogenesis in tissue culture.