Aerial architecture in higher plants is dependent on the activity of the shoot apical meristem (SAM) and axillary meristems (AMs). The SAM produces a main shoot and leaf primordia, while AMs are generated at the axils of leaf primordia and give rise to branches and flowers. Therefore, the formation of AMs is a critical step in the construction of plant architecture. Here, we characterized the rice (Oryza sativa) lax panicle2 (lax2) mutant, which has altered AM formation. LAX2 regulates the branching of the aboveground parts of a rice plant throughout plant development, except for the primary branch in the panicle. The lax2 mutant is similar to lax panicle1 (lax1) in that it lacks an AM in most of the lateral branching of the panicle and has a reduced number of AMs at the vegetative stage. The lax1 lax2 double mutant synergistically enhances the reduced-branching phenotype, indicating the presence of multiple pathways for branching. LAX2 encodes a nuclear protein that contains a plant-specific conserved domain and physically interacts with LAX1. We propose that LAX2 is a novel factor that acts together with LAX1 in rice to regulate the process of AM formation.