Induction of the pluripotent cell mass termed callus from detached organs or tissues is an initial step in typical in vitro plant regeneration, during which auxin-induced ectopic activation of root stem cell factors is required for subsequent de novo shoot regeneration. While Arabidopsis (Arabidopsis thaliana) AUXIN RESPONSE FACTOR 7 (ARF7) and ARF19 and their downstream transcription factors LATERAL ORGAN BOUNDARIES DOMAIN (LBD) are known to play key roles in directing callus formation, the molecules responsible for activation of root stem cell factors and thus establishment of callus pluripotency are unclear. Here, we identified Arabidopsis WRKY23 and BASIC HELIX-LOOP-HELIX 041 (bHLH041) as a transcriptional activator and repressor, respectively, of root stem cell factors during establishment of auxin-induced callus pluripotency. We show that auxin-induced WRKY23 downstream of ARF7 and ARF19 directly activates the transcription of PLETHORA 3 (PLT3) and PLT7 and thus that of the downstream genes PLT1, PLT2, and WUSCHEL-RELATED HOMEOBOX 5 (WOX5), while LBD-induced removal of bHLH041 derepresses the transcription of PLT1, PLT2, and WOX5. We provide evidence that transcriptional activation by WRKY23 and loss of bHLH041-imposed repression act synergistically in conferring shoot-regenerating capability on callus cells. Our findings thus disclose a transcriptional mechanism underlying auxin-induced cellular reprogramming, which, together with previous studies, outlines the molecular framework of auxin-induced pluripotent callus formation for in vitro plant regeneration programs.