SG3, an R2R3 MYB protein coding gene that tightly linked to a major QTLGS3, negatively regulates grain length while dependent on the status ofGS3in rice. It is often very difficult to isolate a minor QTL that is closely linked to a major QTL in rice. In this study, we focused on the isolation of a minor grain length QTL, small grain 3 (SG3), which is closely linked to the major QTL grain size 3 (GS3). The genetic effect of SG3 on grain length was dependent on GS3 status. Its genetic effect was larger in the presence of nonfunctional sg3 than functional SG3. A large number of near-isogenic F2 plants in which GS3 was fixed with nonfunctional alleles were developed to clone SG3. A gene encoding an R2R3 MYB domain transcriptional regulator was identified as the candidate gene for SG3. SG3 overexpression and knockdown plants showed shortened and elongated grains, respectively, which demonstrated that SG3 acts as a negative regulator of grain length. SG3 was preferentially expressed in panicles after flowering, and SG3 acted as a transcription activator. Comparative sequencing analysis identified a 12-bp insertion in the third exon of NYZ that led to a frameshift and resulted in a premature stop codon. The insertion/deletion was associated with grain length in the presence of functional GS3 in the indica subspecies. SG3 and GS3 were frequently in coupling phase in indica rice, making them good targets for the breeding of cultivars with short or long grains. The isolation of the SG3 MYB gene provides new gene resource and contributes to the regulatory network of grain length in rice.