Radial Oxygen Loss (ROL) occurs in rice roots through the root surface and root hairs. Subsequently, the oxidation of ferrous ion (Fe2+) to ferric ion (Fe3+) results in the formation of reddish-brown iron (Fe) plaque. The Fe plaque has been reported to sequester metals and metalloids such as As, Cd, Cr, Cu, Fe, P, Pb, and Zn. Despite plenty of studies on the physiochemical mechanism of Fe plaque formation, its molecular mechanism is unclear. Therefore, we aimed to identify the gene responsible for its regulation and assess its molecular mechanism. Here we obtained an AZ1302 mutant with reduced root hairs, ROL, and Fe plaque formation from the sodium azide mutagenesis of IR64 rice variety. Quantitative trait locus mapping for Fe plaque was conducted on the F2 population, leading to the identification of the gene on chromosome 12, with phytoene synthase 2 (OsPSY2) as a candidate gene. The reduction of root hairs, ROL, and Fe plaque in the CRISPR/Cas9 induced psy2 mutants and its reconstitution through the overexpression of OsPSY2 in AZ1302 mutant-like recombinant inbred lines confirmed that OsPSY2 regulates Fe plaque formation. Moreover, the GUS expression pattern showed that OsPSY2 is expressed in the adventitious roots linked with profuse root hairs and Fe plaque formation. As phytoene synthase ultimately regulates ABA biosynthesis, psy2 mutants exhibited reduced ABA and exogenous ABA restored root hairs and Fe plaque formation in psy2 mutants. Our results provide novel insights into the mechanism of Fe plaque formation in rice roots.