Transparent Testa16 (TT16), a transcript regulator belonging to the B(sister) MADS box proteins, regulates proper endothelial differentiation and proanthocyanidin accumulation in the seed coat. Our understanding of its other physiological roles, however, is limited. In this study, the physiological and developmental roles of TT16 in an important oil crop, canola (Brassica napus), were dissected by a loss-of-function approach. RNA interference (RNAi)-mediated down-regulation of tt16 in canola caused dwarf phenotypes with a decrease in the number of inflorescences, flowers, siliques, and seeds. Fluorescence microscopy revealed that tt16 deficiency affects pollen tube guidance, resulting in reduced fertility and negatively impacting embryo and seed development. Moreover, Bntt16 RNAi plants had reduced oil content and altered fatty acid composition. Transmission electron microscopy showed that the seeds of the RNAi plants had fewer oil bodies than the nontransgenic plants. In addition, tt16 RNAi transgenic lines were more sensitive to auxin. Further analysis by microarray showed that tt16 down-regulation alters the expression of genes involved in gynoecium and embryo development, lipid metabolism, auxin transport, and signal transduction. The broad regulatory function of TT16 at the transcriptional level may explain the altered phenotypes observed in the transgenic lines. Overall, the results uncovered important biological roles of TT16 in plant development, especially in fatty acid synthesis and embryo development.