During vegetative development, higher plants continuously form new leaves in regular spatial and temporal patterns. Mutants with abnormal leaf developmental patterns not only provide a great insight into understanding the regulatory mechanism of plant architecture, but also enrich the ways to its modification by which crop yield could be improved. Here, we reported the characterization of the rice leafy-head2 (lhd2) mutant that exhibits shortened plastochron, dwarfism, reduced tiller number, and failure of phase transition from vegetative to reproductive growth. Anatomical and histological study revealed that the rapid emergence of leaves in lhd2 was resulted from the rapid initiation of leaf primordia whereas the reduced tiller number was a consequence of the suppression of the tiller bud outgrowth. The molecular and genetic analysis showed that LHD2 encodes a putative RNA binding protein with 67% similarity to maize TE1. Comparison of genome-scale expression profiles between wild-type and lhd2 plants suggested that LHD2 may regulate rice shoot development through KNOX and hormone-related genes. The similar phenotypes caused by LHD2 mutation and the conserved expression pattern of LHD2 indicated a conserved mechanism in controlling the temporal leaf initiation in grass.