The formation of shoot branches plays a key role in plant development. Here, we show that ORYZA SATIVA HOMEOBOX1 (OSH1), a member of class I knotted-like homeobox (KNOX) genes, is involved in shoot branching in rice (Oryza sativa). During axillary bud formation, OSH1 began to be expressed in the presumptive region of the axillary meristem, and continued its expression in the established axillary meristem. In the osh1 mutant, axillary meristem formation was impaired, resulting in a failure in tiller formation. Considering a suggested role of OSH1 in the shoot apical meristem, OSH1 is likely to play an important role in maintaining undifferentiated cells during axillary bud formation.