A layer of cells in plant leaves and stems that forms a sheath surrounding the vascular bundles. In C₄ plants (see c₄ pathway) the bundle sheath cells contain chloroplasts and are the site of the Calvin–Bassham–Benson cycle. The initial fixation of carbon dioxide to form malic acid takes place in the palisade mesophyll cells, which in C₄ plants form a circle around the bundle sheath. This arrangement, known as Kranz anatomy or structure (after the German Kranz, ‘wreath’), ensures that the palisade cells are in close contact with the bundle sheath cells so that the malic acid can easily pass to the bundle sheath. It also means that the products of photosynthesis can be quickly transferred from the bundle sheath to the adjacent phloem tissue for transport to other parts of the plant. See also heterobaric leaf anatomy.