A terminal bud is the growing tip of a plant stem, located at the end of the stem or branch. It is responsible for the vertical growth of the plant and contains undifferentiated cells that can develop into new leaves, flowers, or branches. The terminal bud plays a crucial role in the plant's overall growth and development. As the terminal bud grows, it produces hormones that inhibit the growth of lateral buds, a phenomenon known as apical dominance. This ensures that the plant grows taller rather than wider, allowing it to compete effectively for sunlight. Terminal buds are essential for the health and structure of plants like trees and shrubs.