Acyl-acyl carrier protein thioesterases determine the amount and type of fatty acids that are exported from the plastids. To better understand the role of the FATB class of acyl-acyl carrier protein thioesterases, we identified an Arabidopsis mutant with a T-DNA insertion in the FATB gene. Palmitate (16:0) content of glycerolipids of the mutant was reduced by 42% in leaves, by 56% in flowers, by 48% in roots, and by 56% in seeds. In addition, stearate (18:0) was reduced by 50% in leaves and by 30% in seeds. The growth rate was reduced in the mutant, resulting in 50% less fresh weight at 4 weeks compared with wild-type plants. Furthermore, mutant plants produced seeds with low viability and altered morphology. Analysis of individual glycerolipids revealed that the fatty acid composition of prokaryotic plastid lipids was largely unaltered, whereas the impact on eukaryotic lipids varied but was particularly severe for phosphatidylcholine, with a >4-fold reduction of 16:0 and a 10-fold reduction of 18:0 levels. The total wax load of fatb-ko plants was reduced by 20% in leaves and by 50% in stems, implicating FATB in the supply of saturated fatty acids for wax biosynthesis. Analysis of C₁₈ sphingoid bases derived from 16:0 indicated that, despite a 50% reduction in exported 16:0, the mutant cells maintained wild-type levels of sphingoid bases, presumably at the expense of other cell components. The growth retardation caused by the fatb mutation was enhanced in a fatb-ko act1 double mutant in which saturated fatty acid content was reduced further. Together, these results demonstrate the in vivo role of FATB as a major determinant of saturated fatty acid synthesis and the essential role of saturates for the biosynthesis and/or regulation of cellular components critical for plant growth and seed development.