In many flowering plants, petals initiate in alternate positions from first whorl sepals, suggesting possible signaling between sepal boundaries and petal initiation sites. PETAL LOSS (PTL) and RABBIT EARS (RBE) regulate petal initiation in Arabidopsis thaliana and their transcripts are expressed in sepal boundary and petal initiation sites, respectively, suggesting that PTL acts in a non-cell-autonomous manner. Here, we determined that cells expressing PTL and RBE fusion proteins did not overlap but were adjacent, confirming the non-cell-autonomous function of PTL. Genetic ablation of intersepal cells by expressing the diphtheria toxin-A chain gene driven by the PTL promoter resulted in flowers lacking petals, suggesting these cells are required for petal initiation. Transcriptome analysis combined with a PTL induction system revealed 42 genes that were upregulated under PTL activation, including UNUSUAL FLORAL ORGANS (UFO), which likely plays an important role in petal initiation. These findings suggest a molecular mechanism in which PTL indirectly regulates petal initiation and UFO mediates positional signaling between the sepal boundary and petal initiation sites.