The Chinese lantern phenotype or inflated calyx syndrome (ICS) is a postfloral morphological novelty in Physalis. Its origin is associated with the heterotopic expression of the MADS box gene 2 from Physalis floridana (MPF2) in floral organs, yet the process underlying its identity remains elusive. Here, we show that MPF3, which is expressed specifically in floral tissues, encodes a core eudicot APETALA1-like (euAP1) MADS-domain protein. MPF3 was primarily localized to the nucleus, and it interacted with MPF2 and some floral MADS-domain proteins to selectively bind the CC-A-rich-GG (CArG) boxes in the MPF2 promoter. Downregulating MPF3 resulted in a dramatic elevation in MPF2 in the calyces and androecium, leading to enlarged and leaf-like floral calyces; however, the postfloral lantern was smaller and deformed. Starch accumulation in pollen was blocked. MPF3 MPF2 double knockdowns showed normal floral calyces and more mature pollen than those found in plants in which either MPF3 or MPF2 was downregulated. Therefore, MPF3 specifies calyx identity and regulates ICS formation and male fertility through interactions with MPF2/MPF2. Furthermore, both genes were found to activate Physalis floridana invertase gene 4 homolog, which encodes an invertase cleaving Suc, a putative key gene in sugar partitioning. The novel role of the MPF3-MPF2 regulatory circuit in male fertility is integral to the origin of ICS. Our results shed light on the evolution and development of ICS in Physalis and on the functional evolution of euAP1s in angiosperms.