Miniature inverted-repeat transposable elements (MITEs) are predicted to play important roles on genome evolution. We developed a BLASTN-based approach for de novo identification of MITEs and systematically analyzed MITEs in rice genome. The genome of rice cultivar Nipponbare (Oryza sativa ssp. japonica) harbors 178,533 MITE-related sequences classified into 338 families. Pairwise nucleotide diversity and phylogenetic tree analysis indicated that individual MITE families were resulted from one or multiple rounds of amplification bursts. The timing of amplification burst varied considerably between different MITE families or subfamilies. MITEs are associated with 23,623 (58.2%) genes in rice genome. At least 7,887 MITEs are transcribed and more than 3,463 were transcribed with rice genes. The MITE sequences transcribed with rice coding genes form 1,130 pairs of potential natural sense/antisense transcripts. MITEs generate 23.5% (183,837 of 781,885) of all small RNAs identified from rice. Some MITE families generated small RNAs mainly from the terminals, while other families generated small RNAs predominantly from the central region. More than half (51.8%) of the MITE-derived small RNAs were generated exclusively by MITEs located away from genes. Genome-wide analysis showed that genes associated with MITEs have significantly lower expression than genes away from MITEs. Approximately 14.8% of loci with full-length MITEs have presence/absence polymorphism between rice cultivars 93-11 (O. sativa ssp. indica) and Nipponbare. Considering that different sets of genes may be regulated by MITE-derived small RNAs in different genotypes, MITEs provide considerable diversity for O. sativa.