Rht-D1c (Rht10) carried by Chinese wheat (Triticum aestivum) line Aibian 1 is an allele at the Rht-D1 locus. Among the Rht-1 alleles, little is known about Rht-D1c although it determines an extreme dwarf phenotype in wheat. Here, we cloned and functionally characterized Rht-D1c using a combination of Southern blotting, target region sequencing, gene expression analysis and transgenic experiments. We found that the Rht-D1c allele was generated through a tandem segmental duplication (TSD) of a >1 Mb region, resulting in two copies of the Rht-D1b. Two copies of Rht-D1b in the TSD were three-fold more effective in reducing plant height than a single copy, and transformation with a segment containing the tandemly duplicated copy of Rht-D1b resulted in the same level of reduction of plant height as the original copy in Aibian 1. Our results suggest that changes in gene copy number are one of the important sources of genetic diversity and some of these changes could be directly associated with important traits in crops.