Knotted (Kn1), a dominant mutation in maize, perturbs normal leaf development. Mutant leaves have localized regions of extra growth called knots and, in addition to the normal ligule, ectopic fringes of ligule are found on the leaf blade. Previous clonal analysis showed that the epidermal genotype was immaterial in knot formation. To establish which inner leaf layer was required for formation of knots and ectopic ligule we used a closely linked albino mutation to mark X-ray-induced clonal sectors of wild type (kn) tissue in Kn1 plants. The sectors examined frequently changed in composition of layers in the leaf both transversely and longitudinally. We present results that show that both mutant characters are determined in the middle mesophyll-bundle sheath (MMBS) layer. We show that a lateral vein can produce a knot when only half the MMBS layer around the lateral vein contains the mutant gene. We also show that the ectopic ligule in Kn1 has contributions from both the adaxial epidermal and adaxial mesophyll layer.