Background Among the diseases in rice (Oryza sativa L.), bacterial leaf blight (BLB) caused by Xanthomonas oryzae pv. oryzae results in devastating economic losses, both in terms of yield and quality. The Xa21 mapped to the rice chromosome 11, is known to convey resistance against BLB by its involvement in plant pathogen recognition and immunity responses. The closely-linked sequence-tagged site marker pTA248 is frequently used for marker-assisted selection (MAS) of Xa21. However, lower precision and linkage drag of linked-markers hinders the reliability and effectiveness in MAS compared to the use of flanking or intergenic markers. Results In the current study, a diagnostic intragenic marker was developed for MAS of Xa21 in rice. The new marker ABUOP0001 targets a 19-bp insertion/deletion (InDel) on the ectodomain of the Xa21, and amplifies a 200-bp amplicon from the rice line IRBB 62, which is known-to-carry the ‘resistance allele’, and a 181-bp amplicon from IRBB 7, which is known-to-carry the ‘susceptible allele’. The resistance allele was identified in ten IRBB lines, and five newly improved Sri Lankan rice accessions through ABUOP0001 marker assay. In a field study, 14 of these accessions conveyed highly resistant BLB disease responses, and one conveyed an intermediate response. While carrying the susceptible allele at Xa21, 30 accessions conveyed a resistance response to BLB, and it could be due to the contribution of other Xa resistance alleles in their genetic background. Further, the Xa21 resistance allele was identified in 1,675 rice accessions through an in silico analysis of genomic sequences available through the 3K Rice Genomes Project. The intragenic marker ABUOP0001 performs equally to that of the linked-marker pTA248 anchored 224 kbp upstream of Xa21, in detecting resistant and susceptible BLB phenotypes. The marker ABUOP0001 is compatible for high-throughput screening with high resolution melting (HRM) and can be multiplexed effectively with an intragenic marker of BLB resistance gene Xa4. Conclusion The marker ABUOP0001 is a diagnostic intragenic marker that can be recommended for MAS of Xa21 in rice. The marker can be assayed as a high-throughput marker using HRM and multiplexed PCR.