C-TERMINALLY ENCODED PEPTIDEs (CEPs) are secreted peptide hormones that regulate root system architecture non-cell-autonomously. In Medicago truncatula, MtCEP1 boosts nodule formation and inhibits lateral root emergence by unknown pathways (Mohd-Radzman et al Plant Physiology, in press). Genetic and cell biological analyses show that MtCEP1 peptide-dependent increases in nodulation requires the SYM signalling pathway and MtEIN2, but acts independently of SUNN. An MtEIN2-independent pathway controls MtCEP1-dependent inhibition of lateral root development. MtCEP1 boosts nodulation number and nitrogen fixation by increasing rhizobial infections and root developmental competency for nodulation resulting in larger, multi-lobbed, nodules. These phenotypes overlap with those of the ein2 mutant except that nodules develop more extensively. Furthermore, MtCEP1 counteracts the suppression of nodulation induced by the ethylene precursor, ACC, and the ethylene synthesis inhibitor, AVG, antagonises MtCEP1-dependent root phenotypes. We found that mutants defective in the MtCRA2 (COMPACT ROOT ARCHITECTURE 2) receptor, which is a homologue of the CEP1 receptor in Arabidopsis, are unresponsive to MtCEP1. CRA2 mutants have abnormal lateral root and development but AVG can attenuate its phenotype. These results indicate that MtCEP1 and its likely receptor, CRA2, act through different pathways to regulate nodulation and lateral root development in M. truncatula.