The rice orthologue of maize domestication gene Teosinte branched 1 (Tb1) affects tillering. But, unlike maize Tb1 gene, it was not selected during domestication. Here, we report that an OsTb1 duplicate gene (OsTb2) has been artificially selected during upland rice adaptation and that natural variation in OsTb2 is associated with tiller number. Interestingly, transgenic rice overexpressing this gene shows increased rather than decreased tillering, suggesting that OsTb2 gains a regulatory effect opposite to that of OsTb1 following duplication. Functional analyses suggest that the OsTb2 protein positively regulates tillering by interacting with the homologous OsTb1 protein and counteracts the inhibitory effect of OsTb1 on tillering. We further characterize two functional variations within OsTb2 that regulate protein function and gene expression, respectively. These results not only present an example of neo-functionalization that generates an opposite function following duplication but also suggest that the Tb1 homologue has been selected in upland rice.