Leaf shape is determined by polar cell expansion and polar cell proliferation along the leaf axes. However, the genes controlling polar cell proliferation during leaf morphogenesis are largely unknown. We identified a dominant mutant of Arabidopsis thaliana, rotundifolia4-1D (rot4-1D), which possessed short leaves and floral organs. We showed that the altered leaf shape is caused by reduced cell proliferation, specifically in the longitudinal (proximal–distal) axis of the leaf, suggesting that the ROT4 gene controls polar cell proliferation in lateral organs. The ROT4 open-reading frame (ORF) encodes a novel small peptide that had not been identified in the Arabidopsis genome annotation. Overexpression of a ROT4–green fluorescence protein (GFP) fusion protein in transgenic plants recapitulated the rot4 phenotype, suggesting that ROT4 acts to restrict cell proliferation. The ROT4–GFP fusion protein localized to the plasma membrane when expressed in transgenic Arabidopsis plants. Phylogenetic analysis indicates that ROT4 defines a novel seed plant-specific family of small peptides with 22 members in Arabidopsis, ROT FOUR LIKE1–22 (RTFL1–22). All RTFL members share a conserved 29-amino acid domain, the RTF domain, and overexpression of the ROT4 RTF domain alone is sufficient to confer a rot4-1D phenotype. Loss-of-function mutations in several RTFL genes were aphenotypic, suggesting that there may be some functional redundancy between family members. Analyses by reverse transcription-polymerase chain reaction (RT-PCR) and in situ hybridization revealed that ROT4 is expressed in the shoot apex and young leaves of wild-type plants, consistent with a role for ROT4 in controlling polarity-dependent cell proliferation during wild-type leaf morphogenesis.