The flavour or fragrance of basmati and jasmine rice is associated with the presence of 2-acetyl-1-pyrroline. A recessive gene (fgr) on chromosome 8 of rice has been linked to this important trait. Here, we show that a gene with homology to the gene that encodes betaine aldehyde dehydrogenase (BAD) has significant polymorphisms in the coding region of fragrant genotypes relative to non-fragrant genotypes. The accumulation of 2-acetyl-1-pyrroline in fragrant rice genotypes may be explained by the presence of mutations resulting in a loss of function of the fgr gene product. The allele in fragrant genotypes has a mutation introducing a stop codon upstream of key amino acid sequences conserved in other BADs. The fgr gene corresponds to the gene encoding BAD2 in rice, while BAD1 is encoded by a gene on chromosome 4. BAD has been linked to stress tolerance in plants. However, the apparent loss of function of BAD2 does not seem to limit the growth of fragrant rice genotypes. Fragrance in domesticated rice has apparently originated from a common ancestor and may have evolved in a genetically isolated population, or may be the outcome of a separate domestication event. This is an example of effective human selection for a recessive trait during domestication.