Reduced plant height is one of the most important traits related to lodging resistance and crop yield. The use of reduced height genes has been one of the main features in breeding modern high-yielding wheat varieties with less lodging. A spontaneous dwarf mutant DD399 was identified in a high yielding, gibberellic acid (GA)-insensitive, lodging-resistant variety Nongda 399 (ND399). Significant differences in upper internode lengths between mutant DD399 and wild type ND399 were caused by reduced cell elongation. The plant height of ND399 × DD399 F1 hybrids was intermediate between the parents, indicating incomplete dominance or a dose–response effect of a reduced height gene. Plant height showed continuous distribution in the F2 population, and segregation distortion was observed among the 2292 F2:3 progenies. The reduced height mutation was characterized by Illumina 90 K iSelect SNP genotyping and bulked segregant RNA-Seq (BSR-Seq) analysis of the segregating population. A concentrated cluster of polymorphic SNPs associated with the reduced height phenotype was detected in the distal region of chromosome arm 2BL. Co-segregation of reduced height phenotype with the clustered markers revealed a 36 Mb terminal deletion of chromosome 2BL in mutant DD399.