The columnar growth habit of apple is interesting from an economic point of view as the pillar-like trees require little space and labor. Genetic engineering could be used to speed up breeding for columnar trees with high fruit quality and disease resistance. For this purpose, this study dealt with the molecular causes of this interesting phenotype. The original bud sport mutation that led to the columnar growth habit was found to be a novel nested insertion of a Gypsy-44 LTR retrotransposon on chromosome 10 at 18.79 Mb. This subsequently causes tissue-specific differential expression of nearby downstream genes, particularly of a gene encoding a 2OG-Fe(II) oxygenase of unknown function (dmr6-like) that is strongly upregulated in developing aerial tissues of columnar trees. The tissue-specificity of the differential expression suggests involvement of cis-regulatory regions and/or tissue-specific epigenetic markers whose influence on gene expression is altered due to the retrotransposon insertion. This eventually leads to changes in genes associated with stress and defense reactions, cell wall and cell membrane metabolism as well as phytohormone biosynthesis and signaling, which act together to cause the typical phenotype characteristics of columnar trees such as short internodes and the absence of long lateral branches. In future, transformation experiments introducing Gypsy-44 into non-columnar varieties or excising Gypsy-44 from columnar varieties would provide proof for our hypotheses. However, since site-specific transformation of a nested retrotransposon is a (too) ambitious objective, silencing of the Gypsy-44 transcripts or the nearby genes would also provide helpful clues.