As an important osmoprotectant, glycine betaine (GB) plays an essential role in resistance to abiotic stress in a variety of organisms, including rice (Oryza sativa L.). However, GB content is too low to be detectable in rice, although rice genome possesses several orthologs coding for betaine aldehyde dehydrogenase (BADH) involved in plant GB biosynthesis. Rice BADH1 (OsBADH1) has been shown to be targeted to peroxisome and its overexpression resulted in increased GB biosynthesis and tolerance to abiotic stress. In this study, we demonstrated a pivotal role of OsBADH1 in stress tolerance without altering GB biosynthesis capacity, using the RNA interference (RNAi) technique. OsBADH1 was ubiquitously expressed in different organs, including roots, stems, leaves and flowers. Transgenic rice lines downregulating OsBADH1 exhibited remarkably reduced tolerance to NaCl, drought and cold stresses. The decrease of stress tolerance occurring in the OsBADH1-RNAi repression lines was associated with an elevated level of malondialdehyde content and hydrogen peroxidation. No GB accumulation was detected in transgene-positive and transgene-negative lines derived from heterozygous transgenic T0 plants. Moreover, transgenic OsBADH1-RNAi repression lines showed significantly reduced seed set and yield. In conclusion, the downregulation of OsBADH1, even though not causing any change of GB content, was accounted for the reduction of ability to dehydrogenate the accumulating metabolism-derived aldehydes and subsequently resulted in decreased stress tolerance and crop productivity. These results suggest that OsBADH1 possesses an enzyme activity to catalyze other aldehydes in addition to betaine aldehyde (the precursor of GB) and thus alleviate their toxic effects under abiotic stresses.