In this article, we report that carpel specification in the Oryza sativa (rice) flower is regulated by the floral homeotic gene DROOPING LEAF (DL) that is distinct from the well-known ABC genes. Severe loss-of-function mutations of DL cause complete homeotic transformation of carpels into stamens. Molecular cloning reveals that DL is a member of the YABBY gene family and is closely related to the CRABS CLAW (CRC) gene of Arabidopsis thaliana. DL is expressed in the presumptive region (carpel anlagen), where carpel primordia would initiate, and in carpel primordia. These results suggest that carpel specification is regulated by DL in rice flower development. Whereas CRC plays only a partial role in carpel identity, DL may have been recruited to have the more essential function of specifying carpels during the evolution of rice. We also show that DL interacts antagonistically with class B genes and controls floral meristem determinacy. In addition, severe and weak dl alleles fail to form a midrib in the leaf. The phenotypic analysis of dl mutants, together with analyses of the spatial expression patterns and ectopic expression of DL, demonstrate that DL regulates midrib formation by promoting cell proliferation in the central region of the rice leaf.