The initiation and induction of root primordia are of great importance for adventitious root (AR) formation in cutting propagation of horticultural and forestry crops. However, the underlying mechanisms orchestrating these early phases of AR formation remain largely unexplored. Here, we investigated the physiological and transcriptomic changes during the early AR phases in mulberry stem hardwood cuttings. The results showed that the concentrations of soluble proteins increased, whereas concentrations of soluble sugars and starch were decreased. Indole-3-acetic acid (IAA) and zeatin had a rapid transit peak at 6 h after planting (hAP) and declined thereafter. The activities of peroxidase and catalase persistently increased and indole-3-acetic acid oxidase was maintained at a higher stable level from 0 hAP, while the activities of polyphenol oxidase fluctuated with soluble phenolics and IAA levels. The comparative transcriptome identified 4276 common genes that were differentially regulated at −6, 0 and 54 hAP. They were separated into five clusters with distinct biological functions such as defense response and photosynthesis. Considerable common genes were assigned to pathways of sugar metabolism, mitogen-activated protein kinase, and circadian rhythm. The gene co-expression network analysis revealed three major co-expressed modules involved in stress responses, hormone signaling, energy metabolism, starch metabolism, and circadian rhythm. These findings demonstrate the positive effect of auxin on AR induction, and uncovered the crucial roles of stress responses, hormone signaling and circadian rhythm in coordinating the physiological changes during the early phases of AR formation in mulberry stem hardwood cuttings.