Long awns are important for seed dispersal in wild rice (Oryza rufipogon), but are absent in cultivated rice (Oryza sativa). The genetic mechanism involved in loss-of-awn in cultivated rice remains unknown. We report here the molecular cloning of a major quantitative trait locus, An-1, which regulates long awn formation in O. rufipogon. An-1 encodes a basic helix-loop-helix protein, which regulates cell division. The nearly-isogenic line (NIL-An-1) carrying a wild allele An-1 in the genetic background of the awnless indica Guangluai4 produces long awns and longer grains, but significantly fewer grains per panicle compared with Guangluai4. Transgenic studies confirmed that An-1 positively regulates awn elongation, but negatively regulates grain number per panicle. Genetic variations in the An-1 locus were found to be associated with awn loss in cultivated rice. Population genetic analysis of wild and cultivated rice showed a significant reduction in nucleotide diversity of the An-1 locus in rice cultivars, suggesting that the An-1 locus was a major target for artificial selection. Thus, we propose that awn loss was favored and strongly selected by humans, as genetic variations at the An-1 locus that cause awn loss would increase grain numbers and subsequently improve grain yield in cultivated rice.