Dehydroascorbate reductase (DHAR, EC 1.8.5.1) maintains redox pools of ascorbate (AsA) by recycling oxidized AsA to reduced AsA. To investigate whether DHAR affects rice yield under normal environmental conditions, cDNA-encoding DHAR (OsDHAR1) was isolated from rice and used to develop OsDHAR1-overexpressing transgenic rice plants, under the regulation of a maize ubiquitin promoter. Incorporation and expression of the transgene in transgenic rice plants was confirmed by genomic polymerase chain reaction (PCR), semi-quantitative reverse transcription PCR (RT-PCR), western blot, and enzyme activity. The expression levels were at least twofold higher in transgenic (TG) rice plants than in control wild-type (WT) rice plants. In addition, OsDHAR1-overexpression in seven-independent homologous transgenic plants, as compared to WT plants, increased photosynthetic capacity and antioxidant enzyme activities under paddy field conditions, which led to an improved AsA pool and redox homeostasis. Furthermore, OsDHAR1 overexpression significantly improved grain yield and biomass due to the increase of culm and root weights and to enhance panicle and spikelet numbers in the same seven independent TG rice plants during the farming season (2010 and 2011) in South Korea. The OsDHAR protein contained the redox-active site (Cys20), as well as the conserved GSH-binding region, GSH-binding motif, glutathione-S-transferase (GST) N-terminal domain, C-terminal domain interface, and GST C-terminal domain. Therefore, our results indicate that OsDHAR1 overexpression, capable of functioning in AsA recycling, and protein folding increases environmental adaptation to paddy field conditions by the improving AsA pool and redox homeostasis, which enhances rice grain yield and biomass.