Background The growth habit (GH), also named the branching habit, is an important agronomic trait of peanut and mainly determined by the lateral branch angle (LBA). The branching habit is closely related to peanut mechanized farming, pegging, yield, and disease management. Objectives However, the molecular basis underlying peanut LBA needs to be uncovered. Methods In the present study, an erect branching peanut mutant, eg06g, was obtained via 60Co γ-ray-radiating mutagenesis of a spreading-type peanut cultivar, Georgia-06G (G06G). RNA-seq was performed to compare the transcriptome variation of the upper sides and lower sides of the lateral branch of eg06g and G06G. Results In total, 4908 differentially expressed genes (DEGs) and 5833 DEGs were identified between eg06g and G06G from the lower sides and upper sides of the lateral branch, respectively. GO, KEGG, and clustering enrichment analysis indicated that the carbohydrate metabolic process, cell wall organization or biogenesis, and plant hormone signal transduction were mainly enriched in eg06g. Conclusions Further analysis showed that the genes involved in starch biosynthesis were upregulated in eg06g, which contributed to amyloplast sedimentation and gravity perception. Auxin homeostasis and transport-related genes were found to be upregulated in eg06g, which altered the redistribution of auxin in eg06g and in turn triggered apoplastic acidification and activated cell wall modification-related enzymes, leading to tiller angle establishment through the promotion of cell elongation at the lower side of the lateral branch. In addition, cytokinin and GA also demonstrated synergistic action to finely regulate the formation of peanut lateral branch angles. Collectively, our findings provide new insights into the molecular regulation of peanut LBA and present genetic materials for breeding peanut cultivars with ideotypes.