Rumpless chickens exhibit an abnormality in their tail development. The genetics and biology of this trait has been studied for decades to illustrate a broad variation in both the types of inheritance and the severity in the developmental defects of the tail. In this study, we created a backcross pedigree by intercrossing Piao (rumpless) with Xianju (normal) to investigate the genetic mechanisms and molecular basis of the rumpless trait in Piao chicken. Through genome-wide association and linkage analyses, the candidate region was fine-mapped to 798.5 kb (chromosome 2: 86.9 to 87.7 Mb). Whole-genome sequencing analyses identified a single variant, a 4.2 kb deletion, which was completely associated with the rumpless phenotype. Explorations of the expression data identified a novel causative gene, Rum, that produced a long, intronless transcript across the deletion. The expression of Rum is embryo-specific, and it regulates the expression of MSGN1, a key factor in regulating T-box transcription factors required for mesoderm formation and differentiation. These results provide genetic and molecular experimental evidence for a novel mechanism regulating tail development in chicken and report the likely causal mutation for the tail abnormity in the Piao chicken. The novel regulatory gene, Rum, will, due to its role in fundamental embryo development, be of interest for further explorations of a potential role in tail and skeletal development also in other vertebrates.