| Summary: | <i>Ceratophyllum</i> is an ancient and phylogenetically isolated angiosperm lineage. Comparisons between <i>Ceratophyllum</i> and other angiosperms are hampered by uncertainty in inferring organ homologies in this genus of specialized aquatics. Interpretation of shoot morphology is especially problematic in <i>Ceratophyllum</i>. Each node has several leaf-like appendages interpreted as verticillate leaves, modified parts of one and the same leaf or parts of two leaves under decussate phyllotaxis. Vegetative branches are axillary, but reproductive units (interpreted as flowers or inflorescences) are commonly viewed as developing from collateral accessory buds. We studied shoot development in <i>Ceratophyllum submersum</i>, <i>C. tanaiticum</i>, and <i>C. demersum</i> using scanning electron microscopy to clarify shoot morphology and branching patterns. Our data support the idea that the phyllotaxis is essentially decussate with appendages of stipular origin resembling leaf blades. We conclude that a leaf axil of <i>Ceratophyllum</i> possesses a complex of two serial buds, the lower one producing a vegetative branch and the upper one developing a reproductive unit. The reproductive unit is congenitally displaced to the subsequent node, a phenomenon known as concaulescence. Either member of the serial bud complex may be absent. There is a theory based on a synthesis of molecular and morphological data that Chloranthaceae are the closest extant relatives of <i>Ceratophyllum.</i> Serial buds and concaulescence are known in <i>Hedyosmum</i> (Chloranthaceae). Our new interpretation facilitates morphological comparisons between <i>Hedyosmum</i> and <i>Ceratophyllum</i>.
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