Sheath blight (caused by Rhizoctonia solani) is one of the most important constraints in achieving high grain yield in intensive rice production systems. Canopy structure can influence the development of sheath blight epidemics. The objective of this study was to determine the effect of canopy structure parameters such as shoot number, leaf area index, biomass production, contact frequency, light transmittance and plant height on the development of sheath blight epidemics in commercial fields. Field experiments were conducted in both early and late seasons of 2009 and 2010 in Wuxue, Hubei province, China. The effects of nitrogen (N) rate and hill density on structure and production parameters and sheath blight severity were investigated. Sheath blight severity was recorded as a sheath blight index or relative lesion height on inoculated and uninoculated plants in each crop. Lesion length was measured on inoculated plants in 2010. The results showed that the sheath blight index increased with an increase of N rate and hill density in uninoculated plots in each trial. Stepwise multiple regression analysis demonstrated that contact frequency was consistently related to sheath blight. Lesion length on inoculated plants was not correlated with canopy structure. These results indicate that canopy structure influences sheath blight epidemics. A ‘healthy’ canopy resulting from appropriate crop management practices can be used to suppress sheath blight epidemics in rice.