The bulbil, originating in the leaf axil of Lilium lancifolium, functions as a vital reproductive organ for bulbous propagation. The mechanism of bulbil formation, however, is still unclear. In this study, we conducted histological, transcriptomic, and gene function analyses on leaf axil samples throughout bulbil formation. Histological analysis revealed that the bulbils arose from the axillary meristem and bulbil formation undergoes a two-step process: initiation and development. During the bulbil initiation stage, RNA-seq analysis revealed that the differentially expressed genes (DEGs) were primarily enriched in phytohormone-related pathways, especially auxin. Through virus-induced gene silencing (VIGS), the individual silencing phenotypes of nine genes derived from four hormones imply that decreased auxin and ethylene signaling, paired with increased cytokinin and gibberellin, may contribute to bulbil initiation. Among the numerous differentially expressed transcription factors, LlMYB119 may play a role as a candidate gene in auxin-regulated bulbil initiation, as confirmed by quantitative real-time PCR (qRT-PCR) and VIGS. During bulbil development, DEGs showed significant enrichment in carbohydrate metabolism, as well as phytohormone signal transduction. Silencing seven specific genes involved in auxin and ethylene signaling, cytokinin and gibberellin biosynthesis, as well as carbohydrate metabolism, resulted in inhibition of axillary organ development. In summary, this study offers a rich pool of candidate genes, enhancing our understanding of the regulatory mechanism underlying bulbil initiation and development, and holding significant commercial potential for the advancement of new reproductive organs in L. lancifolium.