A <italic>HD‐ZIP III</italic> gene, <italic>PtrHB4,</italic> is required for interfascicular cambium development in <italic>Populus</italic>.

Summary: Wood production is dependent on the activity of the vascular cambium, which develops from the fascicular and interfascicular cambia. However, little is known about the mechanisms controlling how the vascular cambium is developed in woody species. Here, we show that <italic>PtrHB4</italic>, belonging to the <italic>Populus HD‐ZIP III</italic> family, plays a critical role in the process of vascular cambium development. <italic>PtrHB4</italic> was specifically expressed in shoot tip and stem vascular tissue at an early developmental stage. Repression of <italic>PtrHB4</italic> caused defects in the development of the secondary vascular system due to failures in interfascicular cambium formation. By contrast, overexpression of <italic>PtrHB4</italic> induced cambium activity and xylem differentiation during secondary vascular development. Transcriptional analysis of <italic>PtrHB4</italic> repressed plants indicated that auxin response and cell proliferation were affected in the formation of the interfascicular cambium. Taken together, these results suggest that <italic>PtrHB4</italic> is required for interfascicular cambium formation to develop the vascular cambium in woody species. [ABSTRACT FROM AUTHOR]