<p>Rice false smut caused by <i>Ustilaginoidea virens</i> is becoming more serious disease in most of the world’s rice producing regions, including India. In the present investigation we studied the effect of rice false smut on seed germination, grain yield, and seedling vigour and biochemical changes in seedlings emerged from infected panicle. In all the varieties tested, the disease considerably decreased the per cent seed germination and recorded maximum in Bhogali Bora (24.80%) and minimum in Ranjit (6.80%). Seedlings emerged out of seeds from infected panicles showed poor vigour which was measured in terms of reduced shoot and root length as well as fresh and dry weight of shoot and root. The disease has significantly reduced 1000 grain weight (up to 30.37%) and panicle weight (up to 27.89%), and increased chaffiness (up to 29.75%) depending on the number of smutted grains per panicle. Biochemical analysis showed that, healthy seedlings had high amount of phenol than the seedlings emerged from the infected panicles. Our findings revealed that the rice false smut is a potential threat to rice production; therefore proper management strategies must be formulated to minimize losses.</p>