The patterning of initiating organs along specific axes of polarity is critical for the proper development of all higher organisms. Plant lateral organs, such as leaves, are derived from the shoot apical meristems located at the growing tips. After initiation, the leaf primordia of species such as Arabidopsis thaliana differentiate into a polarized structure consisting of a proximal petiole and a distal blade, but the molecular mechanisms that control proximal-distal pattern formation are poorly understood. The transcriptional activators BLADE-ON-PETIOLE1 (BOP1) and BOP2 are known to control Arabidopsis lateral organ differentiation by regulating gene expression along the adaxial-abaxial (dorsal-ventral) and proximal-distal polarity axes. Here, we demonstrate that the development of ectopic blade tissue along bop1 bop2 leaf petioles is strongly suppressed in a dosage-dependant manner by mutations in either of two closely related YABBY (YAB) genes, FILAMENTOUS FLOWER (FIL) and YAB3. Three KNOTTED-LIKE HOMEOBOX (KNOX1) genes also make lesser, and partially redundant, contributions to ectopic blade development in bop1 bop2 leaves. Mutation of these YAB and KNOX1 genes together causes nearly complete suppression of bop1 bop2 ectopic organ outgrowth at the morphological and cellular levels. Our data demonstrate that BOP1 and BOP2 regulate leaf patterning by controlling YAB and KNOX1 gene activity in the developing petiole.