The Arabidopsis genome contains 10 genes belonging to the HD-Zip II family including ATHB2 and HAT2. Previous work has shown that ATHB2 is rapidly and strongly induced by light quality changes that provoke the shade avoidance response whereas HAT2 expression responds to auxin. Here, we present a genome-wide analysis of the HD-Zip II family. Phylogeny reconstruction revealed that almost all of the HD-Zip II genes can be subdivided into 4 clades (alpha-delta), each clade comprising 2-3 paralogs. Gene expression studies demonstrated that all the gamma and delta genes are regulated by light quality changes. Kinetics of induction, low R/FR/high R/FR reversibility and auxin response analyses strongly suggested that HAT1, HAT3 and ATHB4, as ATHB2, are under the control of the phytochrome system whereas HAT2 is up-regulated by low R/FR as a consequence of the induction of the auxin signaling pathway provoked by FR-rich light. Root and shoot digital in situ revealed that gamma and delta genes are also tightly regulated during plant development with both distinct and overlapping patterns. Phenotypes of gain of function and dominant negative lines demonstrated that one or more of the HD-Zip II gamma genes negatively regulate cell proliferation during leaf development in a high R/FR light environment. Finally, target gene analysis using a chimeric transcription factor (HD-Zip2-V-G), known to activate ATHB2 target genes in a glucocorticoid-dependent manner, revealed that all the 10 HD-Zip II genes can be recognized by the HD-Zip 2 domain in vivo, implying an intricate negative feedback network.