The Sucrose export defective1 (Sxd1) gene of maize was cloned and shown to encode a novel protein conserved between plants and cyanobacteria. The structure of the Sxd1 locus was determined in wild-type plants and two independent sxd1 alleles. Expression analysis demonstrated that the gene was transcribed in all green tissues, with highest levels in maturing leaf blades. In situ hybridization studies revealed high levels of Sxd1 mRNA in bundle sheath cells, with lower levels within the mesophyll. The SXD1 protein was localized to chloroplasts, in both bundle sheath and mesophyll cells. Levels of sucrose, glucose, and fructose were compared between wild-type and sxd1 plants. Mutant plants were fully capable of producing sucrose and accumulated all three sugars at concentrations above those measured in wild-type plants. Despite these increased sugar concentrations, photosynthetic gene expression was not significantly downregulated in affected areas of sxd1 leaf blades. These results are consistent with photosynthate being trapped within anthocyanin-accumulating regions of sxd1 leaves due to plasmodesmal occlusion at the bundle sheath-vascular parenchyma boundary of the minor veins. A model for SXD1 function is proposed in which the protein is involved in a chloroplast-to-nucleus signaling pathway necessary for proper late-stage differentiation of maize bundle sheath cells, including the developmentally regulated modification of plasmodesmata.