Unlike maize and wheat, where artificial selection is associated with an almost uniform increase in seed or grain size, domesticated rice exhibits dramatic phenotypic diversity for grain size and shape. Here we clone and characterize GS3, an evolutionarily important gene controlling grain size in rice. We show that GS3 is highly expressed in young panicles in both short- and long-grained varieties but is not expressed in leaves or panicles after flowering, and we use genetic transformation to demonstrate that the dominant allele for short grain complements the long-grain phenotype. An association study revealed that a C to A mutation in the second exon of GS3 (A allele) was associated with enhanced grain length in Oryza sativa but was absent from other Oryza species. Linkage disequilibrium (LD) was elevated and there was a 95.7% reduction in nucleotide diversity (theta(pi)) across the gene in accessions carrying the A allele, suggesting positive selection for long grain. Haplotype analysis traced the origin of the long-grain allele to a Japonica-like ancestor and demonstrated introgression into the Indica gene pool. This study indicates a critical role for GS3 in defining the seed morphologies of modern subpopulations of O. sativa and enhances the potential for genetic manipulation of grain size in rice.