The size and shape of the plant leaf is an important agronomic trait. To understand the molecular mechanism governing plant leaf shape, we characterized a classic rice (Oryza sativa) dwarf mutant named narrow leaf1 (nal1), which exhibits a characteristic phenotype of narrow leaves. In accordance with reduced leaf blade width, leaves of nal1 contain a decreased number of longitudinal veins. Anatomical investigations revealed that the culms of nal1 also show a defective vascular system, in which the number and distribution pattern of vascular bundles are altered. Map-based cloning and genetic complementation analyses demonstrated that Nal1 encodes a plant-specific protein with unknown biochemical function. We provide evidence showing that Nal1 is richly expressed in vascular tissues and that mutation of this gene leads to significantly reduced polar auxin transport capacity. These results indicate that Nal1 affects polar auxin transport as well as the vascular patterns of rice plants and plays an important role in the control of lateral leaf growth.