Lignin is a major component of plant secondary cell walls. Here we describe caffeoyl shikimate esterase (CSE) as an enzyme central to the lignin biosynthetic pathway. Arabidopsis thaliana cse mutants deposit less lignin than do wild-type plants, and the remaining lignin is enriched in p-hydroxyphenyl units. Phenolic metabolite profiling identified accumulation of the lignin pathway intermediate caffeoyl shikimate in cse mutants as compared to caffeoyl shikimate levels in the wild type, suggesting caffeoyl shikimate as a substrate for CSE. Accordingly, recombinant CSE hydrolyzed caffeoyl shikimate into caffeate. Associated with the changes in lignin, the conversion of cellulose to glucose in cse mutants increased up to fourfold as compared to that in the wild type upon saccharification without pretreatment. Collectively, these data necessitate the revision of currently accepted models of the lignin biosynthetic pathway.