The Arabidopsis PINHEAD/ZWILLE (PNH/ZLL) gene is thought to play an important role in the formation of the shoot apical meristem (SAM) and in leaf adaxial cell specification. To investigate the molecular mechanisms of rice development, we have isolated a rice homologue of PNH/ZLL, called OsPNH1. Around the SAM, OsPNH1 was strongly expressed in developing leaf primordia, specifically in the presumptive vascular domains, developing vascular tissues, a few cell-layers of the adaxial region, and future bundle sheath extension cells. In the SAM, only weak expression was observed in the central region, whereas strong expression was detected in the mid-vein region of leaf founder cells in the peripheral SAM domain. We produced transgenic rice plants containing the antisense OsPNH1 strand. The antisense OsPNH1 plants developed malformed leaves with an altered vascular arrangement and abnormal internal structure. These plants also formed an aberrant SAM with reduced KNOX gene expression. We examined the subcellular localization of the OsPNH1-GFP fusion protein and found that it was localized in the cytoplasm. On the basis of these observations, we propose that OsPNH1 functions not only in SAM maintenance as previously thought, but also in leaf formation through vascular development.