The spikelet is the basic unit of the grass inflorescence. In wheat, the spikelet is a short indeterminate branch with two proximal sterile bracts (glumes) followed by a variable number of florets, each including a bract (lemma) with an axillary flower. Varying levels of miR172 and/or its target gene Q (AP2L5) result in gradual transitions of glumes to lemmas and vice versa. Here, we show that AP2L5 and its related paralog AP2L2 play critical and redundant roles in the specification of axillary floral meristems and lemma identity. AP2L2, also targeted by miR172, displayed similar expression profiles as AP2L5 during spikelet development. Loss-of-function mutants in both homeologs of AP2L2 (henceforth ap2l2) developed normal spikelets, but ap2l2 ap2l5 double mutants generated spikelets with multiple empty bracts before transitioning to florets. The coordinated nature of these changes suggest an early role of these genes in floret development. Moreover, the flowers of ap2l2 ap2l5 mutants showed organ defects in paleas and lodicules, including homeotic conversion of lodicules into carpels. Mutations in the miR172 target site of AP2L2 were associated with reduced plant height, more compact spikes, promotion of lemma-like characters in glumes and smaller lodicules. Taken together, our results show that the balance in the expression of miR172 and AP2-like genes is crucial for the correct development of spikelets and florets, and that this balance has been altered during the process of wheat and barley domestication. The manipulation of this regulatory module provides an opportunity to modify spikelet architecture and improve grain yield.