Salinity stress is one of the most important abiotic stress factors affecting rice (Oryza sativa) production worldwide. Using a forward genetics approach, we isolated a salt insensitive TILLING line 1 (sitl1) rice mutant from a gamma-ray irradiated TILLING population. This sitl1 mutant line showed increased salinity tolerance due to reduced Mg2+ and Na+ uptake in root and shoot tissues and in the xylem sap. Whole genome resequencing and RNA-sequencing analyses identified a single nucleotide T insertion in exon 5 of Os01g47460 (putative metal ion transporter) with the CorA-like ZntB cation transfer domain (OsMGT1). Transient expression of the OsMGT1-sGFP fusion protein in rice protoplasts showed OsMGT1 was localized to the plasma membrane. Expression analysis of various tissues and at different growth stages showed that the OsMGT1 was mainly expressed in roots and leaf tissues as an early response to salinity stress. Complementation and overexpression assays in the yeast (Saccharomyces cerevisiae) CM66 strain and wild type showed that the OsMGT1 protein possessed both Mg2+ and Na+ transport activity. Taken together, the mutation of the OsMGT1 gene in the sitl1 mutant reduced the transport abilities of both Na+ and Mg2+ conferring salinity insensitivity in rice.