Grain length is one of the determinants of yield in rice and auxin plays an important role in regulating it by mediating cell growth. Although several genes in the auxin pathway are involved in regulating grain length, the underlying molecular mechanisms remain unclear. In this study we identify a RING-finger and wd40-associated ubiquitin-like (RAWUL) domain-containing protein, Gnp4/LAX2, with a hitherto unknown role in regulation of grain length by its influence on cell expansion. Gnp4/LAX2 is broadly expressed in the plant and subcellular localization analysis shows that it encodes a nuclear protein. Overexpression of Gnp4/LAX2 can significantly increase grain length and thousand-kernel weight. Moreover, Gnp4/LAX2 physically interacts with OsIAA3 and consequently interferes with the OsIAA3-OsARF25 interaction in vitro and in vivo. OsIAA3 RNAi plants consistently exhibit longer grains, while the mutant osarf25 has small grains. In addition, OsARF25 binds to the promoter of OsERF142/SMOS1, a regulator of organ size, and positively regulates its expression. Taken together, the results reveal that Gnp4/LAX2 functions as a regulator of grain length through participation in the OsIAA3-OsARF25-OsERF142 pathway and that it has potential value for molecular breeding in rice.