Adventitious root (AR) formation is a limiting factor in the vegetative propagation of tree peony (Paeonia suffruticosa Andr.). PoARRO-1, which encodes an auxin oxidase involved in AR formation, plays a role in the root development of P. ostii, but its associated molecular regulatory mechanisms are not yet understood. In this study, we examined the role of PoARRO-1 in AR formation in P. ostii. The overexpression of PoARRO-1 in P. ostii test-tube plantlets led to a notable enhancement in both the rooting rate and the average number of ARs in vitro, as well as increased activities of peroxidase (POD), superoxide dismutase (SOD), and indoleacetic acid oxidase (IAAO). PoARRO-1 was involved in the conversion of IAA-Asp and IAA-Glu to OxIAA and promoted IAA oxidation. RNA sequencing analysis revealed that PoARRO-1 overexpression led to upregulation of enzyme activity, auxin metabolism related genes. Further analyses showed that PoARRO-1 interacted with the 1–175 aa position of PoIAA27b to regulate the formation of ARs. We therefore propose that PoARRO-1 interacts with PoIAA27b to promote AR formation, and it may be useful targets for enhancing the in vitro propagation of P. ostii.