The mechanism of floral organ specification is principally conserved in angiosperms, as demonstrated by the ABC model. By contrast, mechanisms that regulate the development of organs or structures specific to a group of species remain unclear. Grasses have unique inflorescence units, comprising spikelets and florets. In the genus Oryza (rice), the single spikelet consists of a fertile floret subtended by a lemma and a palea, two sterile lemmas, and rudimentary glumes. Each sterile lemma is a tiny glume-like organ with a smooth surface. Here, we have examined a long sterile lemma1 (g1) mutant, in which the sterile lemma is enlarged like the lemma. Detailed phenotypic analysis reveals that the large sterile lemma in the g1 mutant appears to be caused by homeotic transformation of the sterile lemma into a lemma, suggesting that G1 is involved in the repression of lemma identity to specify the sterile lemma. Gene isolation reveals that G1 is a member of a plant-specific gene family that encodes proteins with a previously uncharacterized domain, named here ALOG (Arabidopsis LSH1 and Oryza G1). G1 mRNA is expressed in sterile lemma primordia throughout their development, and G1 protein is localized in the nucleus. A trans-activation assay using the yeast GAL4 system suggests that G1 is involved in transcriptional regulation. Repression of lemma identity by G1 is consistent with a hypothesis proposed to explain the morphological evolution of rice spikelets. We also show that a wild rice species, Oryza grandiglumis, that forms large sterile lemmas has serious mutations in the G1 gene.