The herbaceous peony (Paeonia lactiflora Pall.) holds an important position in Chinese culture and is an increasingly popular choice for high-quality cut flowers. The quality of herbaceous peony is significantly impacted by the bending of herbaceous peony stems. Although several regulatory factors participating in stem development have been identified in other plants, only a few involved in herbaceous peony have been reported. In the present investigation, we isolated and cloned the SPL transcription factor PlSPL7 from the herbaceous peony and verified its function in the stems. PlSPL7 has a reading frame that spans 2,683 base pairs and codes for 774 amino acids and contains a conserved SBP structural domain. qRT-PCR showed that the expression of PlSPL7 decreased gradually during herbaceous peony stem development, with significant expression in the stem. Subcellular localization analysis revealed that the PlSPL7 protein localized in both the nucleus and the cytoplasmic membrane. Heterologous overexpression of PlSPL7 resulted in a decrease in stem diameter and strength, as well as a reduction in xylem width and lignin accumulation. These results indicate that PlSPL7 may have a controlling function in the growth of stem and could be a potential candidate gene influencing plant stem straightness through its regulation of lignin accumulation, thereby offering fresh perspectives on plant stem growth and development.