Cadmium (Cd) contamination in a paddy environment can cause phytotoxicity and elevated Cd accumulation in rice (Oryza sativa). Here, we explore Cd toxicity and the mechanism of Cd detoxification in rice. We isolated a cadmium (Cd)-tolerant mutant of rice, named cdt1, from an EMS-mutagenized population of an Indica rice cultivar widely grown in China. At 2 µM Cd, the elongation of the primary roots was inhibited by 79% in the mutant, compared with 96% in wild type. There was no significant difference in Cd uptake between the mutant and wild type. Using genomic resequencing and complementation, OsSHM4 was identified as the causal gene for the mutant phenotype, which encodes a putative serine hydroxymethyltransferase (SHM). The OsSHM4 protein was localized to the nucleus and OsSHM4 gene was expressed in all roots and shoots. OsSHM4 mutation resulted in higher sulphur and selenium accumulation in the shoots and rice grain. Under field conditions, the brown rice of the mutant contained 83 – 92% higher Se concentration than wild type. Transcriptomic analysis showed a significantly higher transcript level of the high-affinity sulphate transporter gene OsSULTR1;1 in the mutant roots. Thiol compounds including cysteine, glutathione and phytochelatins were significantly increased in both roots and shoots of cdt1. Growth and grain biomass were not affected. These results indicate that the nuclear localised OsSHM4 plays an important role in regulating sulphur homeostasis. Its mutation results in increased Cd tolerance and enrichment of selenium in the rice grain.