Tillering in rice (Oryza sativa) is one of the most important agronomic traits that determine grain yields. Previous studies on rice tillering mutants have shown that the outgrowth of tiller buds in rice is regulated by a carotenoid-derived MAX/RMS/D (more axillary branching) pathway, which may be conserved in higher plants. Strigolactones, a group of terpenoid lactones, have been recently identified as products of the MAX/RMS/D pathway that inhibits axillary bud outgrowth. We report here the molecular genetic characterization of d27, a classic rice mutant exhibiting increased tillers and reduced plant height. D27 encodes a novel iron-containing protein that localizes in chloroplasts and is expressed mainly in vascular cells of shoots and roots. The phenotype of d27 is correlated with enhanced polar auxin transport. The phenotypes of the d27 d10 double mutant are similar to those of d10, a mutant defective in the ortholog of MAX4/RMS1 in rice. In addition, 2'-epi-5-deoxystrigol, an identified strigolactone in root exudates of rice seedlings, was undetectable in d27, and the phenotypes of d27 could be rescued by supplementation with GR24, a synthetic strigolactone analog. Our results demonstrate that D27 is involved in the MAX/RMS/D pathway, in which D27 acts as a new member participating in the biosynthesis of strigolactones.