In plants, two independent serine biosynthetic pathways, the photorespiratory and glycolytic phosphoserine (PS) pathways, have been postulated. Although the photorespiratory pathway is well characterized, little information is available on the function of the PS pathway in plants. Here, we present a detailed characterization of phosphoglycerate dehydrogenases (PGDHs) as components of the PS pathway in Arabidopsis thaliana. All PGDHs localize to plastids and possess similar kinetic properties, but they differ with respect to their sensitivity to serine feedback inhibition. Furthermore, analysis of pgdh1 and phosphoserine phosphatase mutants revealed an embryo-lethal phenotype and PGDH1-silenced lines were inhibited in growth. Metabolic analyses of PGDH1-silenced lines grown under ambient and high CO2 conditions indicate a direct link between PS biosynthesis and ammonium assimilation. In addition, we obtained several lines of evidence for an interconnection between PS and tryptophan biosynthesis, because the expression of PGDH1 and phosphoserine aminotransferase1 is regulated by MYB51 and MYB34, two activators of tryptophan biosynthesis. Moreover, the concentration of tryptophan-derived glucosinolates and auxin were reduced in PGDH1-silenced plants. In essence, our results provide evidence for a vital function of PS biosynthesis for plant development and metabolism.