The rice homeobox gene OSH15 (Oryza sativa homeobox) is a member of the knotted1-type homeobox gene family. We report here on the identification and characterization of a loss-of-function mutation in OSH15 from a library of retrotransposon-tagged lines of rice. Based on the phenotype and map position, we have identified three independent deletion alleles of the locus among conventional morphological mutants. All of these recessive mutations, which are considered to be null alleles, exhibit defects in internode elongation. Introduction of a 14 kbp genomic DNA fragment that includes all exons, introns and 5'- and 3'- flanking sequences of OSH15 complemented the defects in internode elongation, confirming that they were caused by the loss-of-function of OSH15. Internodes of the mutants had abnormal-shaped epidermal and hypodermal cells and showed an unusual arrangement of small vascular bundles. These mutations demonstrate a role for OSH15 in the development of rice internodes. This is the first evidence that the knotted1-type homeobox genes have roles other than shoot apical meristem formation and/or maintenance in plant development.