Breeding semi-dwarf varieties to improve lodging resistance has proven to be enormously successful in increasing grain yield since the advent of the “green revolution”. However, the breeding of the majority of semi-dwarf rice varieties in Asia has been dependent on genetic introduction of the mutant alleles of SD1, which encodes a GA 20-Oxidase, OsGA20ox2, for catalyzing GA biosynthesis. Here we report a new rice lodging resistance gene, Shortened basal internodes (SBI), which encodes a gibberellins 2-oxidase and specifically controls the elongation of culm basal internodes through deactivating GA activity. SBI is predominantly expressed in culm basal internodes. Genetic analyses indicate that SBI is a semi-dominant gene affecting rice height and lodging resistance. SBI allelic variants display different activities and are associated with the height of rice varieties. Breeding with higher activity of the SBI allele generates new rice varieties with improved lodging resistance and increased yield. The discovery of the SBI provides a desirable gene resource for producing semi-dwarf rice phenotypes and offers an effective strategy for breeding rice varieties with lodging resistance and high yield.