We identified a short-grain mutant (Short grain1 (Sg1) Dominant) via phenotypic screening of 13,000 rice (Oryza sativa) activation-tagged lines. The causative gene, SG1, encodes a protein with unknown function that is preferentially expressed in roots and developing panicles. Overexpression of SG1 in rice produced a phenotype with short grains and dwarfing reminiscent of brassinosteroid (BR)-deficient mutants, with wide, dark-green, and erect leaves. However, the endogenous BR level in the SG1 overexpressor (SG1:OX) plants was comparable to the wild type. SG1:OX plants were insensitive to brassinolide in the lamina inclination assay. Therefore, SG1 appears to decrease responses to BRs. Despite shorter organs in the SG1:OX plants, their cell size was not decreased in the SG1:OX plants. Therefore, SG1 decreases organ elongation by decreasing cell proliferation. In contrast to the SG1:OX plants, RNA interference knockdown plants that down-regulated SG1 and a related gene, SG1-LIKE PROTEIN1, had longer grains and internodes in rachis branches than in the wild type. Taken together, these results suggest that SG1 decreases responses to BRs and elongation of organs such as seeds and the internodes of rachis branches through decreased cellular proliferation.