Tree peonies (Paeonia sect. Moutan) are important ornamental plants, but their industrial exploitation is limited by the low yield of conventional propagation methods. In the present study, callus formation and development were successfully achieved through the selection of genotypes, developmental stage and position of explants, and plant growth regulators. Petiole layers collected during flowering as explants from seven different tree peony cultivars were cultured on Schenk and Hildebrandt (SH) medium supplemented with 0-2 mg l^-1 2,4-D and subcultured on the same basal medium supplemented with 0.2-0.5 mg l^-1 2,4-D and 2-6 mg l^-1 BA. The best performing cultivar was ‘Golden Era’, which produced a nodular structure within 90 days, while small calluses with low frequency were observed in ‘Luo Yang Hong’. Explants taken from the basal or top petioles between flowering and 1 week after blossom fall showed negligible browning. In contrast, considerable browning was observed in middle petiole explants or those collected later than 1 week after blossom fall. The optimum medium for callus induction was SH medium containing 1 mg l^-1 2,4-D. Callus proliferated into nodule structures on SH medium containing 0.2 mg l^-1 2,4-D and 6 mg l^-1 BA for ‘Golden Era’ and ‘Bartzella’ and 0.5 mg l^-1 2,4-D and 2 mg l^-1 BA for ‘High Noon’. Nodules continued to proliferate under dark conditions. When the nodules of ‘Golden Era’ were transferred onto SH medium supplemented with combination of 0.25 mg l^-1 NAA and 0.5 mg l^-1 thidiazuron, and under continuous light condition shoot-buds differentiated from them. Histological studies suggested that callus derived from cambium and cortex parenchyma cells and then differentiated into nodular callus. Increased division of the epidermal and subepidermal cells of nodular callus led to shoot-bud regeneration.