Rhizoctonia solani is an important phytopathogenic fungus with a wide host range and worldwide distribution. The anastomosis group AG1 IA of R. solani has been identified as the predominant causal agent of rice sheath blight, one of the most devastating diseases of crop plants. As a necrotrophic pathogen, R. solani exhibits many characteristics different from biotrophic and hemi-biotrophic pathogens during co-evolutionary interaction with host plants. Various types of secondary metabolites, carbohydrate-active enzymes, secreted proteins and effectors have been revealed to be essential pathogenicity factors in R. solani. Meanwhile, reactive oxygen species, phytohormone signaling, transcription factors and many other defense-associated genes have been identified to contribute to sheath blight resistance in rice. Here, we summarize the recent advances in studies on molecular interactions between rice and R. solani. Based on knowledge of rice-R. solani interactions and sheath blight resistance QTLs, multiple effective strategies have been developed to generate rice cultivars with enhanced sheath blight resistance.