Maize (Zea mays) leaves develop basipetally (tip to base); the upper blade emerges from the shoot apical meristem (SAM) before the expansion of the lower sheath. Founder cells, leaf initials located in the periphery of the SAM, are distinguished from the SAM proper by the differential accumulation of KNOX proteins. KNOX proteins accumulate in the SAM, but are excluded from maize leaf primordia and leaf founder cells. As in Arabidopsis and tomato (Lycopersicon esculentum), maize shoots failed to initiate new leaves when cultured in the polar auxin transport inhibitor N-1-naphthylphthalamic acid (NPA). We demonstrate that NPA-induced arrest of leaf initiation in maize is correlated with the failure to down-regulate KNOX accumulation in the SAM. In addition, NPA-cultured shoots formed abnormal tubular leaf bases in which the margins failed to separate in the lower leaf zone. The tubular leaf bases always formed in the fourth leaf from the arrested meristem. Moreover, the unseparated margin domains of these tubular leaf bases accumulated ectopic KNOX protein(s). Transfer of NPA-cultured apices to NPA-free media resulted in the resumption of leaf initiation from the SAM and the restoration of normal patterns of KNOX down-regulation, accordingly. These data suggest that the lower sheath margins emerge from the leaf base late in maize leaf development and that the separation of these leaf margin domains is correlated with auxin transport and down-regulation of KNOX proteins. In addition, these results suggest that the down-regulation of KNOX accumulation in maize apices is not upstream of polar auxin transport, although a more complicated feedback network may exist. A model for L1-derived margin development in maize leaves is presented.Plant shoots are comprised of repeated structural segments called phytomers (Fig. 1), each comprised of the leaf, stem, and lateral bud (Sharman, 1942;Galinat, 1959). The phytomeric structure of plants shoots is best illustrated in the morphology of grasses such as maize (Zea mays), in which reduced lateral branch length and an alternate phyllotaxy reveals the stacked arrangement of the lateral organ segments. Fate mapping analyses (Poethig, 1984) demonstrated that approximately 200 founder cells of the maize phytomer are recruited from the shoot apical meristem (SAM) as a clonally, non-distinct unit (Fig. 1). Subsequent development of the phytomer into component parts occurs basipetally, such that the apical domains of the upper leaf blade differentiate first, and the lower domains of the leaf sheath and stem differentiate last (Poethig and Szymkowiak, 1995). Thus, models of early phytomer development distinguish two stages, namely: (a) recruitment of founder cells, and (b) subsequent growth and development of distinct phytomer components (Fig. 1). Recruitment of maize leaf founder cells from the SAM is correlated with the expression of knox (knotted1-like homeobox) genes; knox genes are expressed in the SAM proper but are down-regulated in maize leaf founder cells and leaf primordia (S...