How does rooting powder work?

Rooting hormones were discovered in the 1930s by Dutch scientists. Today, the most common rooting hormone is a chemical called indole-3-butyric acid, or IEB. It is available in both liquid and powder forms. However, home growers rarely require the liquid form because their volume is so low. As a result, the most common product available in garden centers is the powdered rooting. It was at one time thought to be only a synthetic but later found to be produced by plants themselves. As such it is a naturally occurring hormone, but some out dated sources still list it as a synthetic

IBA is converted to indole-3-acetic acid (IAA) and it is in this form that the plant uses to grow roots. IAA is not used because in rooting compound because it is less stable than IBA and tends to break down over time. Some manufacturers recommend against using rooting hormone on food plants because they are trying to defend themselves against possible lawsuits. At any rate, check the label cautions to make sure the variety you're using is safe for food plants. Also, do not dispose of excess rooting hormone in areas where it can contaminate water supplies or soil. It should be treated like any bioactive chemical and disposed of in a solid waste facility.

A second naturally occurring root growth hormone is Naphthoxyacetic acid and is sometimes used with IBA.