Rice MONOCULM 1 (MOC1) and its orthologues LS/LAS (lateral suppressor in tomato and Arabidopsis) are key promoting factors of shoot branching and tillering in higher plants. However, the molecular mechanisms regulating MOC1/LS/LAS have remained elusive. Here we show that the rice tiller enhancer (te) mutant displays a drastically increased tiller number. We demonstrate that TE encodes a rice homologue of Cdh1, and that TE acts as an activator of the anaphase promoting complex/cyclosome (APC/C) complex. We show that TE coexpresses with MOC1 in the axil of leaves, where the APC/CTE complex mediates the degradation of MOC1 by the ubiquitin–26S proteasome pathway, and consequently downregulates the expression of the meristem identity gene Oryza sativa homeobox 1, thus repressing axillary meristem initiation and formation. We conclude that besides having a conserved role in regulating cell cycle, APC/CTE has a unique function in regulating the plant-specific postembryonic shoot branching and tillering, which are major determinants of plant architecture and grain yield.