Secondary growth in woody plants generates new cells and tissues via the activity of the vascular cambium and drives the radial expansion of stems and roots. It is regulated by a series of endogenous factors, especially transcription factors. Here, we cloned the basic helix-loop-helix (bHLH) transcription factor gene UNFERTILIZED EMBRYO SAC12 (UNE12) from poplar (Populus alba × Populus glandulosa Uyeki) and used biochemical, molecular, and cytological assays to investigate the biological functions and regulatory mechanism of PagUNE12. PagUNE12 mainly localized in the nucleus and possessed transcriptional activation activity. It was widely expressed in vascular tissues, including primary phloem and xylem and secondary phloem and xylem. Poplar plants overexpressing PagUNE12 showed significantly reduced plant height, shorter internodes, and curled leaves compared with wild-type plants. Optical microscopy and transmission electron microscopy revealed that overexpressing PagUNE12 promoted secondary xylem development, with thicker secondary cell walls than wild-type poplar. Fourier transform infrared spectroscopy, confocal Raman microscopy, and 2D Heteronuclear Single Quantum Correlation analysis indicated that these plants also had increased lignin contents, with a lower relative abundance of syringyl lignin units and a higher relative abundance of guaiacyl lignin units. Therefore, overexpressing PagUNE12 promoted secondary xylem development and increased the lignin contents of secondary xylem in poplar, suggesting that this gene could be used to improve wood quality in the future.