Lignification of secondary cell walls is a major factor conferring recalcitrance of lignocellulosic biomass to deconstruction for fuels and chemicals. Genetic modification can reduce lignin content and enhance saccharification efficiency, but usually at the cost of moderate-to-severe growth penalties. We have developed a method, using a single DNA construct that uses CRISPR–Cas9 gene editing to knock-out expression of an endogenous gene of lignin monomer biosynthesis while at the same time expressing a modified version of the gene’s open reading frame that escapes cutting by the Cas9 system and complements the introduced mutation in a tissue-specific manner. Expressing the complementing open reading frame in vessels allows for the regeneration of Arabidopsis plants with reduced lignin, wild-type biomass yield, and up to fourfold enhancement of cell wall sugar yield per plant. The above phenotypes are seen in both homozygous and bi-allelic heterozygous T1 lines, and are stable over at least four generations. The method provides a rapid approach for generating reduced lignin trees or crops with one single transformation event, and, paired with a range of tissue-specific promoters, provides a general strategy for optimizing loss-of-function traits that are associated with growth penalties. This method should be applicable to any plant species in which transformation and gene editing are feasible and validated vessel-specific promoters are available.