A stepped light guide illumination system employing a planar sheet of an optically transmissive material having a stepped light guiding structure including one or more parallel arrays of channels. Light is input into the stepped light guiding structure using a number of side-emitting LED sources located within the channels and coupled to the stepped light guiding structure at multiple locations. The LED sources are mounted to a printed circuit board extending along one or more channels and having a width which is greater than a width of the respective channel. Light is extracted from the stepped light guiding structure using a two-dimensional pattern of light extraction features formed in a surface of the planar sheet.