Leaf development underlies crop growth and productivity and has been a major target of crop domestication and improvement. However, most genes controlling leaf development in barley remain unknown. We identified a dwarf and liguleless (dl) mutant derived by ethylmethane sulfonate mutagenesis. The dl mutant showed dramatic changes in shoot architecture compared with wild-type (Yangnongpi 5) plants. Besides lacking ligules, the dl mutant showed much shorter plant height (28 cm) than Yangnongpi 5 (78 cm). By map-based cloning, the dl gene was localized to a 56.58-kb genomic interval on the long arm of chromosome 7. A C-to-T single-nucleotide substitution was identified at exon position 790, and is a functional mutation resulting in a proline-to-serine substitution at the 264th amino acid residue of HORVU7Hr1G106960. Consequently, HORVU7Hr1G106960 was identified as the DL gene, encoding 269 amino acids and containing the Arabidopsis LSH1 and Oryza G1 (ALOG) domain. DL is highly similar to rice OsG1-LIKE 1/2 (OsG1L1/2) and sorghum AWN1/AWN1-10 at the amino acid level. Although the dl mutant allele showed no expression changes in selected tissues by real-time PCR, we propose HORVU7Hr1G106960 as a candidate gene conferring the dwarf and liguleless phenotype in barley.