The normal development of shoot structures depends on controlling the growth, proliferation and differentiation of cells derived from the shoot apical meristem. We have identified the CYP78A5 gene encoding a putative cytochrome P450 monooxygenase that is the first member of the CYP78 family from Arabidopsis. This gene is strongly expressed in the peripheral regions of the vegetative and reproductive shoot apical meristems, defining a boundary between the central meristematic zone and the developing organ primordia. In addition, CYP78A5 shows a dynamic pattern of expression during floral development. Overexpression of CYP78A5 affects multiple cell types, causing twisting and kinking of the stem and defects in floral development. To define the relationship of CYP78A5 to genes controlling meristem function, we examined CYP78A5 expression in plants mutant for SHOOT MERISTEMLESS, ZWILLE and ARGONAUTE, and have found that CYP78A5 expression is altered in these mutant backgrounds. We propose that CYP78A5 has a role in regulating directional growth in the peripheral region of the shoot apical meristem in response to cues established by genes regulating meristem function.