The mutualistic association of roots with ectomycorrhizal fungi promotes plant health and is a hallmark of boreal and temperate forests worldwide. In the pre-colonization phase, before direct contact, lateral root (LR) production is massively stimulated, yet little is known about the signals exchanged during this step. Here, we identify sesquiterpenes (SQTs) as biologically active agents emitted by Laccaria bicolor while interacting with Populus or Arabidopsis. We show that inhibition of fungal SQT production by lovastatin strongly reduces LR proliferation and that (-)-thujopsene, a low-abundance SQT, is sufficient to stimulate LR formation in the absence of the fungus. Further, we show that the ectomycorrhizal ascomycote, Cenococcum geophilum, which cannot synthesize SQTs, does not promote LRs. We propose that the LR-promoting SQT signal creates a win-win situation by enhancing the root surface area for plant nutrient uptake and by improving fungal access to plant-derived carbon via root exudates.