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Grain size is a key determinant of both grain weight and grain quality. Here, we report the map-based cloning of a novel quantitative trait locus (QTL), <i>GLW7.1</i> (<i>Grain Length</i>, <i>Width and Weight 7.1</i>), which encodes the CCT motif family protein, GHD7. The QTL is located in a 53 kb deletion fragment in the cultivar Jin23B, compared with the cultivar CR071. Scanning electron microscopy analysis and expression analysis revealed that <i>GLW7.1</i> promotes the transcription of several cell division and expansion genes, further resulting in a larger cell size and increased cell number, and finally enhancing the grain size as well as grain weight. <i>GLW7.1</i> could also increase endogenous GA content by up-regulating the expression of GA biosynthesis genes. Yeast two-hybrid assays and split firefly luciferase complementation assays revealed the interactions of GHD7 with seven grain-size-related proteins and the rice DELLA protein SLR1. Haplotype analysis and transcription activation assay revealed the effect of six amino acid substitutions on GHD7 activation activity. Additionally, the NIL with <i>GLW7.1</i> showed reduced chalkiness and improved cooking and eating quality. These findings provide a new insight into the role of <i>Ghd7</i> and confirm the great potential of the <i>GLW7.1</i> allele in simultaneously improving grain yield and quality.