In eukaryotes, a protein motif consisting of WG/GW repeats, also called the Argonaute (AGO) hook, is thought to be essential for binding AGO proteins to fulfill their functions in RNA-mediated gene silencing. Although a number of WG/GW-containing proteins have been computationally identified in Arabidopsis, their roles in plant growth and development are unknown. Here, we show that the Arabidopsis Suppressor of Ty insertion 6-like (SPT6L) gene, which encodes a protein with C-terminal WG/GW repeats, plays critical roles in embryonic development. SPT6L is evolutionarily conserved only in vascular plants, with varying numbers of C-terminal WG/GW repeats, which are plant-species specific. spt6l mutants formed embryos with an aberrant apical-basal axis, showing insufficient development of the basal domain and embryonic lethality. Expression domains of the class-III homeodomain-leucine zipper (HD-ZIP III) genes PHABULOSA (PHB) and PHAVOLUTA (PHV) were expanded in the spt6l embryo. In contrast, the PLETHORA1 (PLT1) gene, which acts antagonistically to the HD-ZIP III genes in specification of basal fate, was severely down-regulated in the spt6l mutant. Furthermore, the phb phv double mutations partially rescued aberrant basal development in the spt6l background and restored PLT1 expression. Collectively, our results indicate that SPT6L is essential for specification of the apical-basal axis, partly by controlling the HD-ZIP III genes in embryos.