OSH6 (Oryza sativa Homeobox6) is an ortholog of lg3 (Liguleless3) in maize. We generated a novel allele, termed OSH6-Ds, by inserting a defective Ds element into the third exon of OSH6, which resulted in a truncated OSH6 mRNA. The truncated mRNA was expressed ectopically in leaf tissues and encoded the N-terminal region of OSH6, which includes the KNOX1 and partial KNOX2 subdomains. This recessive mutant showed outgrowth of bracts or produced leaves at the basal node of the panicle. These phenotypes distinguished it from the OSH6 transgene whose ectopic expression led to a “blade to sheath transformation” phenotype at the midrib region of leaves, similar to that seen in dominant Lg3 mutants. Expression of a similar truncated OSH6 cDNA from the 35S promoter (35S::ΔOSH6) confirmed that the ectopic expression of this product was responsible for the aberrant bract development. These data suggest that OSH6-Ds interferes with a developmental mechanism involved in bract differentiation, especially at the basal nodes of panicles.