Nodulation in legumes involves the coordination of epidermal infection by rhizobia with cell divisions in the underlying cortex. During nodulation, rhizobia are entrapped within curled root hairs to form an infection pocket. Transcellular tubes called infection threads then develop from the pocket and become colonized by rhizobia. The infection thread grows toward the developing nodule primordia and rhizobia are taken up into the nodule cells, where they eventually fix nitrogen. The epidermal and cortical developmental programs are synchronized by a yet-to-be-identified signal that is transmitted from the outer to the inner cell layers of the root. Using a new allele of the Medicago truncatula mutant Lumpy Infections, lin-4, which forms normal infection pockets but cannot initiate infection threads, we show that infection thread initiation is required for normal nodule development. lin-4 forms nodules with centrally located vascular bundles similar to that found in lateral roots rather than the peripheral vasculature characteristic of legume nodules. The same phenomenon was observed in M. truncatula plants inoculated with the Sinorhizobium meliloti exoY mutant, and the M. truncatula vapyrin-2 mutant, all cases where infections arrest. Nodules on lin-4 have reduced expression of the nodule meristem marker MtCRE1 and do not express root-tip markers. In addition, these mutant nodules have altered patterns of gene expression for the cytokinin and auxin markers CRE1 and DR5. Our work highlights the coordinating role that bacterial infection exerts on the developing nodule and allows us to draw comparisons with primitive actinorhizal nodules and rhizobia-induced nodules on the nonlegume Parasponia andersonii.