Graminaceous plants release ferric-chelating phytosiderophores that bind to iron. These ferric-phytosiderophore complexes are transported across the plasma membrane by a protein produced from Yellow Stripe 1 (YS1). Here, we report the characterization of OsYSL16, one of the YS1-like genes in rice. Real-time analysis revealed that this gene was constitutively expressed irrespective of metal status. Promoter fusions of OsYSL16 to β-glucuronidase (GUS) showed that OsYSL16 was highly expressed in the vascular tissues of the root, leaf, and spikelet, and in leaf mesophyll cells. The OsYSL16-green fluorescence protein (GFP) fusion protein was localized to the plasma membrane. From a pool of rice T-DNA insertional lines, we identified two independent activation-tagging mutants in OsYSL16. On an Fe-deficient medium, those mutants retained relatively high chlorophyll concentrations compared with the wild-type (WT) controls, indicating that they are more tolerant to a lack of iron. The Fe concentration in shoots was also higher in the OsYSL16 activation lines than in the WT. During germination, the rate of Fe-utilization from the seeds was higher in the OsYSL16 activation lines than in the WT seeds. Our results suggest that the function of OsYSL16 in Fe-homeostasis is to enable distribution of iron within a plant.