Plant cytochrome P450 has diverse roles in developmental processes and in the response to environmental cues. Here, we characterized the rice (Oryza sativa L ssp. indica cultivar 3037) semi-dwarf mutant sd37, in which the gene CYP96B4 (Cytochrome P450 96B subfamily) was identified and confirmed as the target by map-based cloning and a complementation test. A point mutation in the SRS2 domain of CYP96B4 resulted in a threonine to lysine substitution in the sd37 mutant. Examination of the subcellular localization of the protein revealed that SD37 was ER-localized protein. And SD37 was predominantly expressed in the shoot apical meristem and developing leaf and root maturation zone but not in the root apical meristem. The sd37 leaves, panicles, and seeds were smaller than those of the wild type. Histological analysis further revealed that a decrease in cell number in the mutant, specifically in the shoots, was the main cause of the dwarf phenotype. Microarray analysis demonstrated that the expression of several cell division-related genes was disturbed in the sd37 mutant. In addition, mutation or strongly overexpression of SD37 results in dwarf plants but moderate overexpression increases plant height. These data suggest that CYP96B4 may be an important regulator of plant growth that affects plant height in rice.