Advanced transcriptome sequencing has revealed that the majority of eukaryotic genes undergo alternative splicing (AS). Nonetheless, little effort has been dedicated to investigating the functional relevance of particular splicing events, even those in the key developmental and hormonal regulators. Combining approaches of genetics, biochemistry and advanced confocal microscopy, we describe the impact of alternative splicing on the PIN7 gene in the model plant Arabidopsis thaliana. PIN7 encodes a polarly localized transporter for the phytohormone auxin and produces two evolutionarily conserved transcripts, PIN7a and PIN7b. PIN7a and PIN7b, differing in a four amino acid stretch, exhibit almost identical expression patterns and subcellular localization. We reveal that they are closely associated and mutually influence each other's mobility within the plasma membrane. Phenotypic complementation tests indicate that the functional contribution of PIN7b per se is minor, but it markedly reduces the prominent PIN7a activity, which is required for correct seedling apical hook formation and auxin-mediated tropic responses. Our results establish alternative splicing of the PIN family as a conserved, functionally relevant mechanism, revealing an additional regulatory level of auxin-mediated plant development.