We report two new recessive mutations in Arabidopsis, mgoun1 and mgoun2 which cause a reduction in the number of leaves and floral organs, larger meristems and fasciation of the inflorescence stem. Although meristem structure is affected in the mutants, we provide evidence that its overall organisation is normal, as shown by the expression patterns of two meristem markers. Microscopical analyses suggest that both mutations affect organ primordia production. mgo1 strongly inhibits leaf production in a weak allele of shoot meristemless, stm-2. In addition, mgo1 and 2 severely reduce the ability of the fasciata1 and 2 mutants to initiate organs, although meristem formation per se was not inhibited. The strong allele, stm-5, is epistatic to mgo1, showing that the presence of meristematic cells is essential for MGO1 function. These results suggest a role for the MGO genes in primordia initiation although a more general role in meristem function can not be excluded. We describe a form of fasciation which is radically different from that described for clavata, which is thought to have an increased size of the meristem centre. Instead of one enlarged central meristem mgo1 and 2 show a continuous fragmentation of the shoot apex into multiple meristems, which leads to the formation of many extra branches. The phenotype of mgo1 clv3 and mgo2 clv3 double mutants suggest that the MGO and CLV genes are involved in different events. In conclusion, our results reveal two new components of the regulatory network controlling meristem function and primordia formation. A model for MGO genes is discussed.