Comparative analysis using available genomic resources within closely related species is an effective way to investigate genomic sequence and structural diversity. Rice (Oryza sativa L.) has undergone significant physiological and morphological changes during its domestication and local adaptation. We present a complete bacterial artificial chromosome (BAC) physical map for the aus rice cultivar ‘Kasalath’, which covers 90% of the sequence of temperate japonica rice cultivar ‘Nipponbare’. Examination of physical distances between computational and experimental measurements of ‘Kasalath’ BAC insert size revealed the presence of more than 500 genomic regions that appear to have significant chromosome structural changes between the two cultivars. In particular, a genomic region on the long arm of ‘Kasalath’ chromosome 11 carrying a disease-resistance gene cluster was greatly expanded relative to the ‘Nipponbare’ genome. We also decoded 41.37 Mb of high-quality genomic sequence from ‘Kasalath’ chromosome 1. Extensive comparisons of chromosome 1 between ‘Kasalath’ and ‘Nipponbare’ led to the discovery of 317 843 single-nucleotide polymorphisms (SNPs) and 66 331 insertion/deletion (indel) sites. Nearly two-thirds of the expressed genes on rice chromosome 1 carried natural variations involving SNPs and/or indels that resulted in substitutions, insertions or deletions of amino acids in one cultivar relative to the other. We also observed gain and loss of genes caused by large indels. This study provides an important framework and an invaluable dataset for further understanding of the molecular mechanisms underlying the evolution and functions of the rice genome.