Mutations in the TUMOROUS SHOOT DEVELOPMENT2 (TSD2) gene reduce cell adhesion, and in strongly affected individuals cause non-coordinated shoot development that leads to disorganized tumor-like growth in vitro. tsd2 mutants showed increased activity of axial meristems, reduced root growth and enhanced de-etiolation. The expression domains of the shoot meristem marker genes KNAT1 and KNAT2 were enlarged in the mutant background. Soil-grown tsd2 mutants were dwarfed, but overall showed morphology similar to that of the wild-type (WT). The TSD2 gene was identified by map-based cloning. It encodes a novel 684 amino acid polypeptide containing a single membrane-spanning domain in the N-terminal part and S-adenosyl-l-methionine binding and methyltransferase domains in the C-terminal part. Expression of a TSD2:GUS reporter gene was detected mainly in meristems and young tissues. A green fluorescent protein-tagged TSD2 protein localized to the Golgi apparatus. The cell-adhesion defects indicated altered pectin properties, and we hypothesize that TSD2 acts as a pectin methyltransferase. However, analyses of the cell-wall composition revealed no significant differences of the monosaccharide composition, the uronic acid content and the overall degree of pectin methylesterification between tsd2 and WT. The findings support a function of TSD2 as a methyltransferase, with an essential role in cell adhesion and coordinated plant development.