ABSTRACT OsAAI1 belongs to the HPS_like subfamily of the AAI_LTSS superfamily, yet the molecular mechanism by which it regulates root development under osmotic stress remains unclear. In this study, we found that overexpressing OsAAI1 significantly promoted rice root system growth. Specifically, the primary root length, lateral root number, lateral root density and adventitious root count in the overexpression line (OE19) markedly exceeded those in the wild type (ZH11) and the osaai1 mutant. Consistent with this phenotypic enhancement, the root IAA content in OE19 was substantially higher than in ZH11 and osaai1 . We further demonstrated that exogenous IAA application compensated for the root growth defects in the osaai1 mutant. Under PEG‐induced osmotic stress, OE19 exhibited the most extensive and densely distributed root system, and exogenous IAA also rescued the inhibited growth of the osaai1 mutant. Mechanistically, we identified an interaction between OsAAI1 and the MADS‐box transcription factor OsMADS25. This interaction enhanced the transcriptional expression of two key osmotic stress tolerance genes, LAX1 and OsBAG4 . Furthermore, it upregulated the auxin biosynthesis gene OsYUC4 while suppressing the auxin inhibitory factor OsIAA14 . This coordinated gene regulation promotes the auxin signalling pathway, thereby stimulating root growth and enhancing osmotic stress tolerance. Collectively, our findings indicate that OsAAI1 and OsMADS25 fulfil critical functions in rice osmotic acclimation by orchestrating downstream gene expression and modulating the auxin pathway.