Tobacco plants (Nicotiana tabacum cv XHFD 8) were genetically modified to express a bacterial 4-hydroxycinnamoyl-CoA hydratase/lyase (HCHL) enzyme which is active with intermediates of the phenylpropanoid pathway. We have previously shown that HCHL expression in tobacco stem resulted in various pleiotropic effects, indicative of a reduction in the carbon flux through the phenylpropanoid pathway, accompanied by an abnormal phenotype. Here, we report that in addition to the reduction in lignin and phenolic biosynthesis, HCHL expression also resulted in several gross morphological changes in poorly lignified tissue, such as abnormal mesophyll and palisade. The effect of HCHL expression was also noted in lignin-free single cells, with suspension cultures displaying an altered shape and different growth patterns. Poorly/non-lignified cell walls also exhibited a greater ease of alkaline extractability of simple phenolics and increased levels of incorporation of vanillin and vanillic acid. However, HCHL expression had no significant effect on the cell wall carbohydrate chemistry of these tissues. Evidence from this study suggests that changes in the transgenic lines result from a reduction in phenolic intermediates which have an essential role in maintaining structural integrity of low-lignin or lignin-deprived cell walls. These results emphasize the importance of the intermediates and products of phenylpropanoid pathway in modulating aspects of normal growth and development of tobacco. Analysis of these transgenic plants also shows the plasticity of the lignification process and reveals the potential to bioengineer plants with reduced phenolics (without deleterious effects) which could enhance the bioconversion of lignocellulose for industrial applications.