Arabidopsis NPR1/NIM1 is a key regulator of systemic acquired resistance (SAR), which confers lasting broad-spectrum resistance. Over-expression of Arabidopsis NPR1 or the NPR1 homolog 1 (NH1) in rice results in enhanced resistance to the pathogen Xanthomonasoryzae pv. oryzae (Xoo), suggesting the presence of a related defense pathway in rice. We investigated this pathway in rice by identifying proteins that interact with NH1. Here we report the isolation and characterization of a rice cDNA encoding a novel protein, named NRR (for negative regulator of resistance). NRR interacts with NPR1 in the NPR1-interacting domain (NI25) consisting of 25 amino acids. NRR also interacts with NH1; however, NI25 was not sufficient for a strong interaction, indicating a difference between the rice and the Arabidopsis proteins. Silencing of NRR in rice had little effect on resistance to Xoo. When constitutively over-expressed in rice, NRR affected basal resistance, age-related resistance and Xa21-mediated resistance, causing enhanced susceptibility to Xoo. This phenotype was correlated with elevated NRR mRNA and protein levels and increased Xoo growth. Over-expression of NRR suppressed the induction of defense-related genes. NRR:GFP (green fluorescent protein) protein was localized to the nucleus, indicating that NRR may act directly to suppress the activation of defense genes. The fact that NRR compromises Xa21-mediated resistance indicates cross-talk or overlap between NH1- and Xa21-mediated pathways.