Dicot leaf primordia initiate at the flanks of the shoot apical meristem and extend laterally by cell division and cell expansion to form the flat lamina, but the molecular mechanism of lamina outgrowth remains unclear. Here, we report the identification of STENOFOLIA (STF), a WUSCHEL-like homeobox transcriptional regulator, in Medicago truncatula, which is required for blade outgrowth and leaf vascular patterning. STF belongs to the MAEWEST clade and its inactivation by the transposable element of Nicotiana tabacum cell type1 (Tnt1) retrotransposon insertion leads to abortion of blade expansion in the mediolateral axis and disruption of vein patterning. We also show that the classical lam1 mutant of Nicotiana sylvestris, which is blocked in lamina formation and stem elongation, is caused by deletion of the STF ortholog. STF is expressed at the adaxial-abaxial boundary layer of leaf primordia and governs organization and outgrowth of lamina, conferring morphogenetic competence. STF does not affect formation of lateral leaflets but is critical to their ability to generate a leaf blade. Our data suggest that STF functions by modulating phytohormone homeostasis and crosstalk directly linked to sugar metabolism, highlighting the importance of coordinating metabolic and developmental signals for leaf elaboration.