As an important agronomic trait, inclination of leaves is crucial for crop architecture and grain yields. To understand the molecular mechanism controlling rice leaf angles, one rice leaf inclination2 (lc2, three alleles) mutant was identified and functionally characterized. Compared to wild-type plants, lc2 mutants have enlarged leaf angles due to increased cell division in the adaxial epidermis of lamina joint. The LC2 gene was isolated through positional cloning, and encodes a vernalization insensitive 3-like protein. Complementary expression of LC2 reversed the enlarged leaf angles of lc2 plants, confirming its role in controlling leaf inclination. LC2 is mainly expressed in the lamina joint during leaf development, and particularly, is induced by the phytohormones abscisic acid, gibberellic acid, auxin, and brassinosteroids. LC2 is localized in the nucleus and defects of LC2 result in altered expression of cell division and hormone-responsive genes, indicating an important role of LC2 in regulating leaf inclination and mediating hormone effects.