All higher plants contain an ent-kaurene oxidase (KO), as such a cytochrome P450 (CYP) 701 family member is required for gibberellin (GA) phytohormone biosynthesis. While gene expansion and functional diversification of GA-biosynthesis-derived diterpene synthases into more specialized metabolism has been demonstrated, no functionally divergent KO/CYP701 homologs have been previously identified. Rice (Oryza sativa) contains five CYP701A subfamily members in its genome, despite the fact that only one (OsKO2/CYP701A6) is required for GA biosynthesis. Here we demonstrate that one of the other rice CYP701A subfamily members, OsKOL4/CYP701A8, does not catalyze the prototypical conversion of the ent-kaurene C4α-methyl to a carboxylic acid, but instead carries out hydroxylation at the nearby C3α position in a number of related diterpenes. In particular, under conditions where OsKO2 catalyzes the expected conversion of ent-kaurene to ent-kaurenoic acid required for GA biosynthesis, OsKOL4 instead efficiently reacts with ent-sandaracopimaradiene and ent-cassadiene to produce the corresponding C3α-hydroxylated diterpenoids. These compounds are expected intermediates in biosynthesis of the oryzalexin and phytocassane families of rice antifungal phytoalexins, respectively, and can be detected in rice plants under the appropriate conditions. Thus, it appears that OsKOL4 plays a role in the more specialized diterpenoid metabolism of rice, and our results provide evidence for divergence of a KO/CYP701 family member from GA biosynthesis. This further expands the range of enzymes recruited from the ancestral GA primary pathway to the more complex and specialized labdane-related diterpenoid metabolic network found in rice.