Plant height is an important agronomic trait that determines the grain yield of rice, which is one of the most important food crops worldwide. However, the molecular mechanism underlying rice height remained further investigated. In this study, we characterized a rice dwarf and small grain mutant designated dsg7 (dwarf and small grain 7) from Kitaake with seed treated by ethyl methane sulfonate (EMS). Compared with Kitaake, dsg7 showed 22% and 21% reduction on the plant height and 1000-grain weight. Histological observations showed that the dwarf phenotype was mainly due to a defect in cell proliferation. By deploying the map-based cloning strategy, the gene was finally mapped between markers DM6 and DM8 on chromosome 7, with a physical distance of 237 kb. One base pair deletion of Os07g0616000 was found, and this gene served as the best candidate. Thus, this result suggested that DSG7 might be essential for plant height development in rice and its biological function remained to be investigated in the future.