While callogenesis in date palm can be initiated by culturing immature leaf segments on medium containing 2,4-dichlorophenoxyacetic acid (2,4-D), it is difficult to obtain callus from certain genotypes. To better understand the mechanisms of callogenesis in date palm, we studied the developmental events underlying this process at the cellular level. The callogenic capacity of leaf segments depends on the state of cell differentiation. The most callogenic segments were within the leaf elongation zone, required polar auxin transport to initiate callogenesis and contained the highest quantities of free endogenous indole- 3-acetic acid. At the cellular level, callus induction involves two spatially and temporally separated events. The first event involves cells from the fascicular parenchyma in an equatorial plane perpendicular to the vascular axis that within 2 days of culture in the presence of 2,4-D, acquire structural and ultrastructural features typically observed in meristematic cells. The second event occurs 3 days later and is characterised by the modification of adjacent perivascular sheath cells. The latter cells become callogenic in that they reinitiated their cell cycles and undergo cell division leading to callus formation. These data provide evidence that callus initiation in leaf vascular tissue of date palm involves a sequential response of two distinct cell types to auxin and requires polar auxin transport.