Cadmium (Cd) is a biologically non-essential and toxic heavy metal leaking to the environment via natural emission or anthropogenic activities, thereby contaminating crops and threatening human health. Metallothioneins (MTs) are a group of metal-binding proteins playing critical roles in metal allocation and homeostasis. In this study, we identified a novel function of OsMT1e from rice plants. OsMT1e was dominantly expressed in roots at all developmental stages and, to less extent, expressed in leaves at vegetative and seed filling stages. OsMT1e was mainly targeted to the nucleus and substantially induced by Cd exposure. Expression of OsMT1e in a yeast Cd-sensitive strain ycf1 conferred cellular tolerance to Cd, even though the ycf1 + OsMT1e cells accumulated more Cd than the control cells (ycf1 + pYES2). Both transgenic rice overexpressing (OX) and repressing OsMT1e by RNA interference (RNAi) were developed. Phenotypic analysis revealed that OsMT1e overexpression enhanced the rice growth concerning the increased shoot or root elongation, dry weight and chlorophyll contents, whereas the RNAi lines displayed a sensitive growth phenotype compared to wild-type. Assessment with 0.5, 2 and 10 μM Cd for two weeks revealed that the RNAi lines accumulated less Cd, while the OX lines had an increased Cd accumulation in root and shoot tissues. The contrasting Cd accumulation phenotypes between the OX and RNAi lines were further confirmed by a long-term study with 0.5 μM Cd for one month. Overall, the study unveiled a new function of OsMT1e in rice, which can be potentially used for engineering genotypes for phytoremediation or minimizing Cd in rice crops.