Xanthomonas campestris pv. vesicatoria bacteria expressing the type III effector protein AvrBs3 induce a hypersensitive response in pepper plants carrying the resistance gene Bs3. Here, we report that infection of susceptible pepper and tomato plants leads to an AvrBs3-dependent hypertrophy of the mesophyll tissue. Agrobacterium-mediated transient expression of the avrBs3 gene in tobacco and potato plants resulted in a similar phenotype. Induction of hypertrophy was shown to depend on the repeat region, nuclear localization signals, and acidic transcription activation domain (AAD) of AvrBs3, suggesting that the effector modulates the host's transcriptome. To search for host genes regulated by AvrBs3 in an AAD-dependent manner, we performed a cDNA-amplified fragment length polymorphism analysis of pepper mRNA populations. Thirteen AvrBs3-induced transcripts were identified and confirmed by reverse transcriptase-polymerase chain reaction. Sequence analysis revealed homologies to auxin-induced and expansinlike genes, which play a role in cell enlargement. These results suggest that some of the AvrBs3-induced genes may be involved in hypertrophy development and that xanthomonads possess type III effectors that steer host gene expression.