Semi-dwarfing improves the lodging resistance and yield of rice, and the vast majority of modern rice varieties harbor the sd1 allele to decrease plant height, resulting in reduced genetic diversity and negative agronomic traits. Thus, exploring alternative sources of dwarfism is imperative for rice breeding. Here, we identified a novel RGA1 allele, d1-w, from a local indica variety Xiaolixiang (XLX) using a map-based cloning approach. Compared with other rice varieties, RGA1 in XLX contained a unique single nucleotide polymorphism that resulted in an additional transcript and reduced functional RGA1 transcript level. The RGA1 from Nipponbare was introduced into XLX to estimate the value of d1-w in rice breeding. Compared with transgenic XLX plants (XLXD1), XLX exhibited reduced plant height, increased stem strength, lower reactive oxygen species accumulation, delayed senescence, stronger photosynthesis, higher grain yield and quality (including external, milling and nutritional qualities), and enhanced resistance to drought and Rhizoctonia solani. Therefore, we proposed that the d1-w allele has potential as an excellent dwarfism resource for rice breeding.