CYP51 exists in all organisms that synthesize sterols de novo. Plant CYP51 encodes an obtusifoliol 14alpha-demethylase involved in the postsqualene sterol biosynthetic pathway. According to the current gene annotation, the Arabidopsis (Arabidopsis thaliana) genome contains two putative CYP51 genes, CYP51A1 and CYP51A2. Our studies revealed that CYP51A1 should be considered an expressed pseudogene. To study the functional importance of the CYP51A2 gene in plant growth and development, we isolated T-DNA knockout alleles for CYP51A2. Loss-of-function mutants for CYP51A2 showed multiple defects, such as stunted hypocotyls, short roots, reduced cell elongation, and seedling lethality. In contrast to other sterol mutants, such as fk/hydra2 and hydra1, the cyp51A2 mutant has only minor defects in early embryogenesis. Measurements of endogenous sterol levels in the cyp51A2 mutant revealed that it accumulates obtusifoliol, the substrate of CYP51, and a high proportion of 14alpha-methyl-delta8-sterols, at the expense of campesterol and sitosterol. The cyp51A2 mutants have defects in membrane integrity and hypocotyl elongation. The defect in hypocotyl elongation was not rescued by the exogenous application of brassinolide, although the brassinosteroid-signaling cascade is apparently not affected in the mutants. Developmental defects in the cyp51A2 mutant were completely rescued by the ectopic expression of CYP51A2. Taken together, our results demonstrate that the Arabidopsis CYP51A2 gene encodes a functional obtusifoliol 14alpha-demethylase enzyme and plays an essential role in controlling plant growth and development by a sterol-specific pathway.