Protein phosphatase inhibitor-2 (PPI-2) is a conserved eukaryotic effector protein that inhibits type one protein phosphatases (TOPP). A transfer-DNA knockdown of AtPPI-2 resulted in stunted growth in both vegetative and reproductive phases of Arabidopsis development. At the cellular level, AtPPI-2 knockdown had 35 to 40% smaller cells in developing roots and leaves. This developmental phenotype was rescued by transgenic expression of the AtPPI-2 cDNA behind a constitutive promoter. Comparative proteomics of developing leaf proteins of wild type (WT) and AtPPI-2 mutant revealed reduced levels of proteins associated with chloroplast development, ribosome biogenesis, transport, and cell cycle regulation processes. Down-regulation of several ribosomal proteins, a DEAD box RNA helicase family protein (AtRH3), Clp protease (ClpP3) and proteins associated with cell division suggests a bottleneck in chloroplast ribosomal biogenesis and cell cycle regulation in AtPPI-2 mutant plants. In contrast, eight out of nine Arabidopsis TOPP isoforms were up-regulated at the transcript level in AtPPI-2 leaves compared to WT. A protein-protein interaction network revealed that more than 75% of the differentially expressed proteins have at least secondary and/or tertiary connections with AtPPI-2. Collectively, these data reveal a potential basis for the growth defects of AtPPI-2 and support the presumed role of AtPPI-2 as a master regulator for TOPPs, which regulate diverse growth and developmental processes.