Moderate plant height and successful establishment of reproductive organs play pivotal roles in rice grain production. The molecular mechanism that controls the two aspects remains unclear in rice. In the present study, we characterized a rice gene, ABNORMAL FLOWER AND DWARF1 (AFD1) that determined plant height, floral development and grain yield. The afd1 mutant showed variable defects including the dwarfism, long panicle, low seed setting and reduced grain yield. In addition, abnormal floral organs were also observed in the afd1 mutant including slender and thick hulls, and hull-like lodicules. AFD1 encoded a DUF640 domain protein and was expressed in all tested tissues and organs. Subcellular localization showed AFD1-green fluorescent fusion protein (GFP) was localized in the nucleus. Meantime, our results suggested that AFD1 regulated the expression of cell division and expansion related genes.