Land plants underwent tremendous evolutionary change following the divergence of the ancestral lineage from algal relatives. Several important developmental innovations appeared as the embryophyte clade diversified, leading to the appearance of new organs and tissue types. To understand how these changes came about, we need to identify the fundamental genetic developmental programs that are responsible for growth, patterning, and differentiation and describe how these programs were modified and elaborated through time to produce novel morphologies. Class III homeodomain-leucine zipper (class III HD-Zip) genes, identified in the model plant Arabidopsis thaliana, provide good candidates for basic land plant patterning genes. We show that these genes may have evolved in a common ancestor of land plants and their algal sister group and that the gene family has diversified as land plant lineages have diversified. Phylogenetic analysis, expression data from nonflowering lineages, and evidence from Arabidopsis and other flowering plants indicate that class III HD-Zip genes acquired new functions in sporophyte apical growth, vascular patterning and differentiation, and leaf development. Modification of expression patterns that accompanied diversification of class III HD-Zip genes likely played an important role in the evolution of land plant form.