The homeobox gene knotted1 (kn1) was first isolated by transposon tagging a dominant leaf mutant in maize. Related maize genes, isolated by virtue of sequence conservation within the homeobox, fall into two classes based on sequence similarity and expression patterns. Here, we report the characterization of two genes, KNAT1 and KNAT2 (for knotted-like from Arabidopsis thaliana) that were cloned from Arabidopsis using the kn1 homeobox as a heterologous probe. The homeodomains of KNAT1 and KNAT2 are very similar to the homeodomains of proteins encoded by class 1 maize genes, ranging from 78 to 95% amino acid identity. Overall, the deduced KNAT1 and KNAT2 proteins share amino acid identities of 53 and 40%, respectively, with the KN1 protein. Intron positions are also fairly well conserved among KNAT1, KNAT2, and kn1. Based on in situ hybridization analysis, the expression pattern of KNAT1 during vegetative development is similar to that of class 1 maize genes. In the shoot apex, KNAT1 transcript is localized primarily to the shoot apical meristem; down-regulation of expression occurs as leaf primordia are initiated. In contrast to the expression of class 1 maize genes in floral and inflorescence meristems, the expression of KNAT1 in the shoot meristem decreases during the floral transition and is restricted to the cortex of the inflorescence stem. Transgenic Arabidopsis plants carrying the KNAT1 cDNA and the kn1 cDNA fused to the cauliflower mosaic virus 35S promoter were generated. Misexpression of KNAT1 and kn1 resulted in highly abnormal leaf morphology that included severely lobed leaves. The expression pattern of KNAT1 in the shoot meristem combined with the results of transgenic overexpression experiments supports the hypothesis that class 1 kn1-like genes play a role in morphogenesis.