Shoot branching and plant height are among the key factors that define the overall architecture of plants. We found that overexpression of a cDNA for a zinc-finger protein of petunia, designated Lateral shoot-Inducing Factor (LIF), in transgenic petunia plants resulted in a dramatic increase in lateral shoots and reduced plant height. LIF overexpression also caused a decrease in the number of cells in the stem, leaf, and flower, accompanied by enlargement of cells. trans-Zeatin was decreased while N6-(Delta2-isopentenyl)adenine was increased in the leaves of LIF-overexpressed petunia. Most of the riboside, ribotide, and glucoside forms were also increased. Expression analysis using a LIF::GUS fusion gene and RT-PCR suggested that LIF is specifically expressed around the bases of axillary buds and weakly in basal part of flowers in wild-type petunia. GFP-LIF-GUS fusion proteins were translocated into the nucleus when transiently expressed in onion epidermal cells. LIF overexpression resulted in enhanced branching also in tobacco and Arabidopsis, indicating the conservation of the response to LIF overexpression among dicotyledonous plants. On the basis of these results we discuss about possible functions of LIF.