Main conclusion: The phenylpropanoid pathway impacts the cork quality development. In cork of bad quality, the flavonoid route is favored, whereas in good quality, cork lignin and suberin production prevails. Cork oaks develop a thick cork tissue as a protective shield that results of the continuous activity of a secondary meristem, the cork cambium, or phellogen. Most studies applied to developmental processes do not consider the cell types from which the samples were extracted. Here, laser microdissection (LM) coupled with transcript profiling using RNA sequencing (454 pyrosequencing) was applied to phellogen cells of trees producing low- and good quality cork. Functional annotation and functional enrichment analyses showed that stress-related genes are enriched in samples extracted from trees producing good quality cork (GQC). This process is under tight transcriptional (transcription factors, kinases) regulation and also hormonal control involving ABA, ethylene, and auxins. The phellogen cells collected from trees producing bad quality cork (BQC) show a consistent up-regulation of genes belonging to the flavonoid pathway as a response to stress. They also display a different modulation of cell wall genes resulting into a thinner cork layer, i.e., less meristematic activity. Based on the analysis of the phenylpropanoid pathway regulating genes, in GQC, the synthesis of lignin and suberin is promoted, whereas in BQC, the same pathway favors the biosynthesis of free phenolic compounds. This study provided new insights of how cell-specific gene expression can determine tissue and organ morphology and physiology and identified robust candidate genes that can be used in breeding programs aiming at improving cork quality.