The effect of reducing particle size on physical properties, the methane yield and energy flow were investigated through the biochemical methane potential (BMP) experiment of aerobic-anaerobic digestion (AAD) of rice straw (RS). The whole straw was crushed through four sieves of different aperture sizes (1, 3, 5, and 7 mm) to obtain the actual and non-uniform particle size distribution (PSD). The results indicated that the actual particle sizes were normally or logarithmic normally distributed. Reducing particle size could significantly promote the aerobic hydrolysis and acidification process, increase the content of volatile fatty acids (VFAs) from 4408.78 to 6225.15 mg/L and the degradation of volatile solids (VS) from 40.56% to 50.49%. The results of path analysis suggested that particle size reduction played an important role in improving lignocellulosic degradability, which was the main factor affecting methane production with the comprehensive decision of 0.4616. The maximum methane production obtained at 1 mm sieve size was 176.47 mLCH4g−1 VS. The phyla of Firmicutes (61.5%), Proteobacteria (9.3%), Chloroflexi (8.3%), Bacteroidetes (4.1%), Cyanobacteria/Chloroplast (4.6%) were mainly responsible for VFAs production and lignocellulose degradation. However, the net negative energy balance was observed at the 1 mm sieve size due to the increased energy input. Therefore, the optimum sieve size for AAD was 3 mm.