During the course of evolution plants have evolved a complex phytohormone-based network to regulate their growth and development. Herein auxins have a pivotal function, as they are involved in controlling virtually every aspect related to plant growth. Indole-3-acetic acid (IAA) is the major endogenous auxin of higher plants that is already known for more than 80 years. In spite of the long-standing interest in this topic, IAA biosynthesis is still only partially uncovered. Several pathways for the formation of IAA have been proposed over the past years, but none of these pathways are yet completely defined. The aim of this review is to summarize the current knowledge on the indole-3-acetamide (IAM)-dependent pathway of IAA production in plants and to discuss the properties of the involved proteins and genes, respectively. Their evolutionary relationship to known bacterial IAM hydrolases and other amidases from bacteria, algae, moss, and higher plants is discussed on the basis of phylogenetic analyses. Moreover, we report on the transcriptional regulation of the Arabidopsis AMI1 gene.