Plant height is an important agronomic trait for crop architecture and yield. Most known factors determining plant height function in gibberellin or brassinosteroid biosynthesis or signal transduction. Here, we report a japonica rice (Oryza sativa ssp. japonica) dominant dwarf mutant, Photoperiod-sensitive dwarf 1 (Psd1). The Psd1 mutant showed impaired cell division and elongation, and a severe dwarf phenotype under long-day conditions, but nearly normal growth in short-day. The plant height of Psd1 mutant could not be rescued by gibberellin or brassinosteroid treatment. Genetic analysis with R1 and F2 populations determined that Psd1 phenotype was controlled by a single dominant locus. Linkage analysis with 101 tall F2 plants grown in a long-day season, which were derived from a cross between Psd1 and an indica cultivar, located Psd1 locus on chromosome 1. Further fine-mapping with 1017 tall F2 plants determined this locus on an 11.5-kb region. Sequencing analysis of this region detected a mutation site in a gene encoding a putative lipid transfer protein; the mutation produces a truncated C-terminus of the protein. This study establishes the genetic foundation for understanding the molecular mechanisms regulating plant cell division and elongation mediated by interaction between genetic and environmental factors.