Plants optimize carbon assimilation while limiting water loss by adjusting stomatal aperture. In grasses, a developmental innovation—the addition of subsidiary cells (SCs) flanking two dumbbell-shaped guard cells (GCs)—is linked to improved stomatal physiology. Here, we identify a transcription factor necessary and sufficient for SC formation in the wheat relative Brachypodium distachyon. Unexpectedly, the transcription factor is an ortholog of the stomatal regulator AtMUTE, which defines GC precursor fate in Arabidopsis. The novel role of BdMUTE in specifying lateral SCs appears linked to its acquisition of cell-to-cell mobility in Brachypodium. Physiological analyses on SC-less plants experimentally support classic hypotheses that SCs permit greater stomatal responsiveness and larger range of pore apertures. Manipulation of SC formation and function in crops, therefore, may be an effective approach to enhance plant performance.