Some members of the CYP51G subfamily has been shown to be obtusifoliol 14α‐demethylase, key enzyme of the sterol and brassinosteroid (BR) biosynthesis, which mediate plant development and response to stresses. However, little is known about the functions of CYP51H subfamily in rice. Here, OsCYP51H3, an ortholog of rice OsCYP51G1 was identified. Compared with wild type, the mutants oscyp51H3 and OsCYP51H3‐RNAi showed dwarf phenotype, late flowering, erected leaves, lower seed‐setting rate, and smaller and shorter seeds. In contrast, the phenotypic changes of OsCYP51H3‐OE plants are not obvious. Metabolomic analysis of oscyp51H3 mutant indicated that OsCYP51H3 may also encode an obtusifoliol 14α‐demethylase involved in phytosterol and BR biosynthesis, but possibly not that of triterpenes. The RNA‐seq results showed that OsCYP51H3 may affect the expression of a lot of genes related to rice development. These findings showed that OsCYP51H3 codes for a putative obtusifoliol 14α‐demethylase involved in phytosterol and BR biosynthesis, and mediates rice development.