Brassinosteroid (BR) homeostasis and signaling are crucial for plant growth and development. CYP734A genes encode cytochrome P450 monooxygenases that control the level of bioactive BRs by degrading BRs. However, fertile plants overexpressing CYP734As have not been reported in rice. Here, we isolated a novel semi-dominant mutant brd3-D, in which T-DNA was inserted approximately 4 kb upstream of the CYP734A4 gene (GenBank Accession AB488667), causing its overexpression. The mutant is characterized by dwarfism, small grains, and erect leaves and is less sensitive to brassinolide-induced lamina joint inclination and primary root elongation. However, increased grain number per main panicle and improved seed setting rate were also found in heterozygous brd3-D. To our knowledge, these traits have not been reported in other BR deficient mutants. Quantitative real-time PCR analysis indicated that phenotypic severity of the brd3-D mutant is positively correlated with the CYP734A4 transcription level. In accordance with the increased expression of CYP734A4, a lower castasterone (a rice BR) content was detected in the brd3-D mutants. Knockout of brd3-D by using the CRISPR/Cas9 system rescued the mutation. In addition, transgenic plants overexpressing CYP734A4 with the 35S enhancer mimicked the brd3-D phenotypes, confirming that moderate overexpression of the CYP734A4 gene can improve grain number per main panicle and the seed setting rate in rice. Further studies showed that overexpression of CYP734A4 influences the expressions of multiple genes involved in the BR pathway, and the expression of CYP734A4 is induced by exogenous brassinolide, confirming the negative regulatory role of CYP734A4 in the BR pathway. CYP734A4 might provide a useful gene resource for developing new high-yielding rice varieties.