Auxin is a key regulator of plant growth and development. Indole-3-acetic acid (IAA), a plant auxin, is mainly produced from tryptophan via indole-3-pyruvate (IPA) in both bryophytes and angiosperms. Angiosperms have multiple, well-documented IAA inactivation pathways, involving conjugation to IAA-aspartate (IAA-Asp)/glutamate by the GH3 auxin-amido synthetases, and oxidation to 2-oxindole-3-acetic acid (oxIAA) by the DAO proteins. However, IAA biosynthesis and inactivation processes remain elusive in lycophytes, an early lineage of spore-producing vascular plants. In this article, we studied IAA biosynthesis and inactivation in the lycophyte Selaginella moellendorffii. We demonstrate that S. moellendorffii mainly produces IAA from the IPA pathway for the regulation of root growth and response to high temperature, similar to the angiosperm Arabidopsis. However, S. moellendorffii exhibits a unique IAA metabolite profile with high IAA-Asp and low oxIAA levels, distinct from Arabidopsis and the bryophyte Marchantia polymorpha, suggesting that the GH3 family is integral for IAA homeostasis in the lycophytes. The DAO homologs in S. moellendorffii share only limited similarity to the well-characterized rice and Arabidopsis DAO proteins. We therefore suggest that these enzymes may have a limited role in IAA homeostasis in S. moellendorffii compared to angiosperms. We provide new insights into the functional diversification of auxin metabolic genes in the evolution of land plants.