The effect of paclobutrazol on the shoot growth retardation and tuber formation was investigated using rooted potato stem cutting variety Igorota. Paclobutrazol sprayed at 0 ppm (water only), 25 ppm PBZ, 50 ppm PBZ using a 10 ml-solution/plant applied at 25, 40 and 55 days after planting. Soil drench was applied at 0 ppm (water only), 15 ppm PBZ and 30 ppm PBZ in a 20 ml-solution/plant. Paclobutrazol significantly reduced the vegetative growth of highly vigorous and tall potato plants. It enhances shoot apices to undergo initiation of primordium to axillary bud development. Promotes reduction in internodes length and early branching in potato plants. It also affected broadening, swelling and thickening of the sub-apical region of stolon tips as prerequisite for tuber growth. It significantly reduced the amount of gibberellin-lie substances in the stolon and shoot causing shift from shoot growth to mobilization of assimilates and nutrients for tuber growth. Against the control, paclobutrazol at 25 ppm applied on the foliage and 30 ppm as soil drenched at 40 DAP effectively induced more number and heavier weight of potato tubers. It also increased accumulation of cytokinin, abscissic acid, starch and sugar levels compared to the untreated plants.