Bast (phloem) fibers, tension wood fibers, and other cells with gelatinous-type secondary walls are rich in crystalline cellulose. In developing bast fibers of flax (Linum usitatissimum), a galactan-enriched matrix (Gn-layer) is gradually modified into a mature cellulosic gelatinous-layer (G-layer), which ultimately comprises most of the secondary cell wall. Previous studies have correlated this maturation process with expression of a putative β-galactosidase. Here, we demonstrate that β-galactosidase activity is in fact necessary for the dynamic remodeling of polysaccharides that occurs during normal secondary wall development in flax fibers. We found that developing stems of transgenic (LuBGAL-RNAi) flax with reduced β-galactosidase activity had lower concentrations of free Gal and had significant reductions in the thickness of mature cellulosic G-layers compared with controls. Conversely, Gn-layers, labeled intensively by the galactan-specific LM5 antibody, were greatly expanded in LuBGAL-RNAi transgenic plants. Gross morphology and stem anatomy, including the thickness of bast fiber walls, were otherwise unaffected by silencing of β-galactosidase transcripts. These results demonstrate a specific requirement for β-galactosidase in hydrolysis of galactans during formation of cellulosic G-layers. Transgenic lines with reduced β-galactosidase activity also had biochemical and spectroscopic properties consistent with a reduction in cellulose crystallinity. We further demonstrated that the tensile strength of normal flax stems is dependent on β-galactosidase-mediated development of the phloem fiber G-layer. Thus, the mechanical strength that typifies flax stems is dependent on a thick, cellulosic G-layer, which itself depends on β-galactosidase activity within the precursor Gn-layer. These observations demonstrate a novel role for matrix polysaccharides in cellulose deposition; the relevance of these observations to the development of cell walls in other species is also discussed.