Panicle size and grain number are important agronomic traits and influence grain yield in rice (Oryza sativa), but the molecular and genetic mechanisms underlying panicle size and grain number control remain largely unknown in crops. Here we report that LARGE2 encodes a HECT-domain E3 ubiquitin ligase OsUPL2 and regulates panicle size and grain number in rice. The loss of function large2 mutants produce large panicles with increased grain number, wide grains and leaves, and thick culms. LARGE2 regulates panicle size and grain number by repressing meristematic activity. LARGE2 is highly expressed in young panicles and grains. Biochemical analyses show that LARGE2 physically associates with ABERRANT PANICLE ORGANIZATION1 (APO1) and APO2, two positive regulators of panicle size and grain number, and modulates their stabilities. Genetic analyses support that LARGE2 functions with APO1 and APO2 in a common pathway to regulate panicle size and grain number. These findings reveal a novel genetic and molecular mechanism of the LARGE2-APO1/APO2 module-mediated control of panicle size and grain number in rice, suggesting that this module is a promising target for improving panicle size and grain number in crops.