Alternative splicing, which generates multiple transcripts from the same gene and potentially different protein isoforms, is a key posttranscriptional regulatory mechanism for expanding proteomic diversity and functional complexity in higher eukaryotes. The most recent estimates, based on whole transcriptome sequencing, indicate that about 95 % of human and 60 % of Arabidopsis multi-exon genes undergo alternative splicing, suggesting important roles for this mechanism in biological processes. However, while the misregulation of alternative splicing has been associated with many human diseases, its biological relevance in plant systems is just beginning to unfold. We review here the few plant genes for which the production of multiple splice isoforms has been reported to have a clear in vivo functional impact. These case studies implicate alternative splicing in the control of a wide range of physiological and developmental processes, including photosynthetic and starch metabolism, hormone signaling, seed germination, root growth and flowering, as well as in biotic and abiotic stress responses. Future functional characterization of alternative splicing events and identification of the transcripts targeted by major regulators of this versatile means of modulating gene expression should uncover the breadth of its physiological significance in higher plants.