Developmental gene families have diversified during land plant evolution. The primary role of YABBY gene family is promoting abaxial fate in model eudicot, Arabidopsis thaliana. However recent results suggest that roles of YABBY genes are not conserved in the angiosperms. In this paper, a rice YABBY gene was isolated, and its expression patterns were analyzed in detail. Sequence characterization and phylogenetic analyses showed the gene is OsYABBY4, which is group-classified into FIL/YAB3 subfamily. Beta-glucuronidase reporter assay and in situ analysis consistently revealed that OsYABBY4 was expressed in the meristems and developing vascular tissue of rice, predominantly in the phloem tissue, suggesting that the function of the rice gene is different from those of its counterparts in eudicots. OsYABBY4 may have been recruited to regulate the development of vasculature in rice. However, transgenic Arabidopsis plants ectopically expressing OsYABBY4 behaved very like those over-expressing FIL or YAB3 with abaxialized lateral organs, suggesting the OsYABBY4 protein domain is conserved with its Arabidopsis counterparts in sequences. Our results also indicate that the functional diversification of OsYABBY4 may be associated with the divergent spatial-temporal expression patterns, and YABBY family members may have preserved different expression regulatory systems and functions during the evolution of different kinds of species.