Small heat shock proteins (sHSPs), a family of proteins with high level of diversity, significantly influence plant stress tolerance and plant development. We have cloned a creeping bentgrass chloroplast-localized sHSP gene, AsHSP26.2 responsive to IAA, GA and 6-BA stimulation. Transgenic creeping bentgrass overexpressing AsHSP26.2 exhibited significantly enhanced plant growth with increased stolon number and length as well as enlarged leaf blade width and leaf sheath diameters, but inhibited leaf trichomes initiation and development in the under-epidermis. Furthermore, AsHSP26.2 overexpression altered phytohormone biosynthesis and signaling transduction, resulting in elevated auxin and gibberellins (GA) accumulation. The results obtained provide novel insights implicating the sHSPs in plant growth and development regulation, and strongly suggest AsHSP26.2 to be a novel candidate for use in crop genetic engineering for enhanced plant biomass production and grain yield.