Domestication of rice included conversion of perennial wild species with few seeds to short plants that produced abundant seeds. Most domestication-associated changes were due to variations in transcription factors and other key genes such as enzymes. Here, we show that multiple yield-related traits associated with indica rice domestication are linked to micro (mi) RNA mediated regulation. Analysis of small (s) RNA datasets from cultivated indica rice lines, a few landraces and two wild relatives of rice revealed the presence of abundant 22-nucleotide (nt) reads in wild relatives that mapped to miR397 precursors. miR397 expressed at very high levels in wild relatives and at negligible levels in high-yielding cultivated lines. In its genera-specific form of 22-nt, miR397 targeted mRNAs coding for laccases to decay and induce robust secondary cascade silencing in wild species that required RNA-dependent RNA polymerase 6. In wild species of rice, reduced expression of laccases resulted in low lignification. As expected, over-expression of miR397 induced de-domestication phenotypes. Interestingly, nearly 26 unknown QTLs previously implicated for rice yield overlapped with laccases and miR397 genes. These results suggest the involvement of miRNAs in rice domestication-associated phenotypes.