Leaf morphology is closely associated with cell division. In rice, mutations in Narrow leaf 1 (NAL1) show narrow leaf phenotypes. Previous studies have shown that NAL1 plays a role in regulating vein patterning and increasing grain yield in indica cultivars, but its role in leaf growth and development remains unknown. In this report, we characterized two allelic mutants of NARROW LEAF1 (NAL1), nal1-2 and nal1-3, both of which showed a 50% reduction in leaf width and length, as well as a dwarf culm. Longitudinal and transverse histological analyses of leaves and internodes revealed that cell division was suppressed in the anticlinal orientation but enhanced in the periclinal orientation in the mutants, while cell size remained unaltered. In addition to defects in cell proliferation, the mutants showed abnormal midrib in leaves. Map-based cloning revealed that nal1-2 is a null allelic mutant of NAL1 since both the whole promoter and a 404-bp fragment in the first exon of NAL1 were deleted, and that a 6-bp fragment was deleted in the mutant nal1-3. We demonstrated that NAL1 functions in the regulation of cell division as early as during leaf primordia initiation. The altered transcript level of G1- and S-phase-specific genes suggested that NAL1 affects cell cycle regulation. Heterogeneous expression of NAL1 in fission yeast (Schizosaccharomyces pombe) further supported that NAL1 affects cell division. These results suggest that NAL1 controls leaf width and plant height through its effects on cell division.