Auxin and polar auxin transport have been implicated in controlling embryo patterning and development in angiosperms but less is known from the gymnosperms. The aims of this study were to determine at what stages of conifer embryo development auxin and polar auxin transport are the most important for normal development and to analyze the changes in embryos after treatment with the polar auxin inhibitor N-1-naphthylphthalamic acid (NPA). For these studies, somatic embryos of Norway spruce (Picea abies L. Karst) were used. Growth on medium containing NPA leads to the formation of embryos with poor shoot apical meristem (SAM) and fused cotyledons, and to a pin-formed phenotype of the regenerated plantlets. The effect of NPA on embryo morphology was most severe if embryos were transferred to NPA-containing medium immediately before cotyledon initiation and SAM specification. Indole-3-acetic acid (IAA) was identified by immunolocalization in developing embryos. The highest staining intensity was seen in early staged embryos and then decreased as the embryos matured. No clear IAA-maxima was seen, although the apical parts of embryos, particularly the protoderm, and the suspensor cells appear to accumulate more IAA, as reflected by the staining pattern. The NPA treatment also caused expanded procambium and a broader root apical meristem in embryos, and a significant increase in the expression of a PIN1-like gene. Taken together, our results show that, for proper cotyledon initiation, correct auxin transport is needed only during a short period at the transition stage of embryo development, probably involving PIN efflux proteins and that a common mechanism is behind proper cotyledon formation within the species of angiosperms and conifers, despite their cotyledon number which normally differs.