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Cytokinins and gibberellins (GAs) play antagonistic roles in regulating reproductive meristem activity. Cytokinins have positive effects on meristem activity and maintenance. During inflorescence meristem development, cytokinin biosynthesis is activated via a KNOX-mediated pathway. Increased cytokinin activity leads to higher grain number, whereas GAs negatively affect meristem activity. The GA biosynthesis genes GA20oxs are negatively regulated by KNOX proteins. KNOX proteins function as modulators, balancing cytokinin and GA activity in the meristem. However, little is known about the crosstalk among cytokinin and GA regulators together with KNOX proteins and how KNOX-mediated dynamic balancing of hormonal activity functions. Through map-based cloning of QTLs, we cloned a GA biosynthesis gene, Grain Number per Panicle1 (GNP1), which encodes rice GA20ox1. The grain number and yield of NIL-GNP1TQ were significantly higher than those of isogenic control (Lemont). Sequence variations in its promoter region increased the levels of GNP1 transcripts, which were enriched in the apical regions of inflorescence meristems in NIL-GNP1TQ. We propose that cytokinin activity increased due to a KNOX-mediated transcriptional feedback loop resulting from the higher GNP1 transcript levels, in turn leading to increased expression of the GA catabolism genes GA2oxs and reduced GA1 and GA3 accumulation. This rebalancing process increased cytokinin activity, thereby increasing grain number and grain yield in rice. These findings uncover important, novel roles of GAs in rice florescence meristem development and provide new insights into the crosstalk between cytokinin and GA underlying development process.