Summary DICER‐LIKE (DCL) enzymes process double‐stranded RNA into small RNAs that act as regulators of gene expression. Arabidopsis DCL4 and DCL2 each allow the post‐transcriptional gene silencing (PTGS) of viruses and transgenes, but primary PTGS‐prone DCL4 outcompetes transitive PTGS‐prone DCL2 in wild‐type plants. This hierarchy likely prevents DCL2 having any detrimental effects on endogenous genes. Indeed, dcl4 mutants exhibit developmental defects and increased sensitivity to genotoxic stress. In this study, the mechanism underlying dcl4 defects was investigated using genetic, biochemical and high‐throughput sequencing approaches. We show that the purple phenotype of dcl4 leaves correlates with carbohydrate over‐accumulation and defective phloem transport, and depends on the activity of SUPPRESSOR OF GENE SILENCING 3, RNA‐DEPENDENT RNA POLYMERASE 6 (RDR6) and DCL2. This phenotype correlates with the downregulation of two genes expressed in the apex and the vasculature, SMAX1‐LIKE 4 (SMXL4) and SMXL5, and the accumulation of DCL2‐ and RDR6‐dependent small interfering RNAs derived from these two genes. Supporting a causal effect, smxl4 smxl5 double mutants exhibit leaf pigmentation, enhanced starch accumulation and defective phloem transport, similar to dcl4 plants. Overall, this study elucidates the detrimental action of DCL2 when DCL4 is absent, and indicates that DCL4 outcompeting DCL2 in wild‐type plants is crucial to prevent the degradation of endogenous transcripts by DCL2‐ and RDR6‐dependent transitive PTGS. Significance Statement The Arabidopsis Dicer‐Like enzymes DCL2 and DCL4 have overlapping functions in post‐transcriptional silencing of viruses and transgenes, but it was not clear why they have antagonistic functions in development. Here by dissecting the impact of DCL2 activity on the small RNA profile of dcl4 plants, we uncovered the unusual accumulation of 22‐nt siRNAs from two protein‐coding genes that are specifically expressed in the apex and the vasculature, and found that the concurrent disruption of these two genes causes leaf pigmentation, starch over‐accumulation and phloem transport defects similar to those observed in some of dcl4 plants.