We have isolated a cDNA clone encoding a homeobox sequence from rice. DNA sequence analysis of this clone, which was designated as Oryza sativa homeobox 1 (OSHI), and a genomic clone encoding the OSH7 sequence have shown that the OSH7 gene consists of five exons and encodes a polypeptide of 361 amino acid residues. Restriction fragment length polymorphism analysis has shown that OSH7 is a single-copy gene located near the phytochrome gene on chromosome 3. lntroduction of the cloned OSH7 gene into rice resulted in altered leaf morphology, which was similar to that of the maize morphological mutant Knotted-7 (Knl), indicating that OSHl is a rice gene homologous to the maize Kn7 gene. RNA gel blot analysis has shown that the gene is primarily expressed in the shoot apices of young rice seedlings. Thisfinding issupported by results of transformation experiments in which the 5'flanking region of the gene directed expression of a reporter gene in the shoot apex, particularly in stipules, of transgenic Arabidopsis. To elucidate the biological function of the OSH7 gene product, the coding region was introduced into Arabidopsis under the control of the cauliflower mosaic virus 35s promoter. Almost all transformants showed abnormal morphology. The typical phenotype was the formation of clumps of abundant vegetative and reproductive shoot apices containing meristems and leaf primordia, which did not form elongated shoots. Some transformants with a less severe phenotype formed elongated shoots but had abnormally shaped leaves and flowers with stunted sepals, petals, and stamens. The abnormal phenotypes were inherited, and the leve1 of expression of the introduced OSH7 correlates with the severity of the phenotype. These findings indicate that the abnormal morphologies of the transgenic plants are caused by the expression of the OSH7 gene product and, therefore, that OSH7 is related to the plant development process.