A transcription factor for Al tolerance, ART1, regulates the expression of at least 30 genes in rice. Here we functionally characterized one of the downstream genes, OsCDT3, which encodes a predicted peptide of only 53 amino acid residues rich in cysteine. Knockdown of this gene resulted in decreased tolerance to Al, but did not affect the tolerance to Cd. The aluminum (Al) content in the root residues including cell wall and the plasma membrane of knockdown lines decreased, but the Al concentration in the root cell sap increased compared with those of the wild-type rice. OsCDT3 was mainly expressed in the roots and its expression was specifically induced by Al exposure, not by low pH and other metals. There was a small genotypic variation in OsCDT3 expression level, but no correlation between Al tolerance and the OsCDT3 variation was found among 17 rice cultivars. Analysis of pOsCDT3::GFP transgenic rice showed that OsCDT3 was expressed at all cells in the root tips. Transient expression of OsCDT3 fused with GFP at both N- and C-termini showed that OsCDT3 was anchored to the plasma membrane. Expression of OsCDT3 in yeast conferred tolerance to Al, but not to Cd. Furthermore, OsCDT3 did not show transport activity for Al in yeast, but was able to directly bind Al in vitro. Taken together, our results indicate that OsCDT3 anchoring to the plasma membrane may play a role in stopping entry of Al into the root cells by binding Al, therefore, contributing to high Al tolerance in rice.