Year-round production in a contained, environmentally controlled 'plant factory' may provide a cost-effective method to produce pharmaceuticals and other high-value products. However, cost-effective production may require substantial modification of the host plant phenotype; for example, using dwarf plants can enable the growth of more plants in a given volume by allowing more plants per shelf and enabling more shelves to be stacked vertically. We show here that the expression of the chimeric repressor for Arabidopsis AtIBH1 (P35S:AtIBH1SRDX) in transgenic tobacco plants (Nicotiana tabacum) induces a dwarf phenotype, with reduced cell size. We estimate that, in a given volume of cultivation space, we can grow five times more AtIBH1SRDX plants than wild-type plants. Although, the AtIBH1SRDX plants also showed reduced biomass compared with wild-type plants, they produced about four times more biomass per unit of cultivation volume. To test whether the dwarf phenotype affects the production of recombinant proteins, we expressed the genes for anti-hepatitis B virus antibodies (anti-HBs) in tobacco plants and found that the production of anti-HBs per unit fresh weight did not significantly differ between wild-type and AtIBH1SRDX plants. These data indicate that P35S:AtIBH1SRDX plants produced about fourfold more antibody per unit of cultivation volume, compared with wild type. Our results indicate that AtIBH1SRDX provides a useful tool for the modification of plant phenotype for cost-effective production of high-value products by stably transformed plants in plant factory conditions.