Activation of phospholipase D (PLD) produces phosphatidic acid (PA), a lipid messenger implicated in cell growth and proliferation, but direct evidence for PLD and PA promotion of growth at the organism level is lacking. Here we characterize a new PLD gene, PLD epsilon, and show that it plays a role in promoting Arabidopsis growth. PLD epsilon is mainly associated with the plasma membrane, and is the most permissive of all PLDs tested with respect to its activity requirements. Knockout (KO) of PLD epsilon decreases root growth and biomass accumulation, whereas over-expression (OE) of PLD epsilon enhances root growth and biomass accumulation. The level of PA was higher in OE plants, but lower in KO plants than in wild-type plants, and suppression of PLD-mediated PA formation by alcohol alleviated the growth-promoting effect of PLD epsilon. OE and KO of PLD epsilon had opposite effects on lateral root elongation in response to nitrogen. Increased expression of PLD epsilon also promoted root hair elongation and primary root growth under severe nitrogen deprivation. The results suggest that PLD epsilon and PA promote organism growth and play a role in nitrogen signaling. The lipid-signaling process may play a role in connecting membrane sensing of nutrient status to increased plant growth and biomass production.