South Hangzhou Bay in eastern China occupies an important position in tracing the origins and dispersal of rice and rice cultures in ancient China. Existing literature suggests that early coastal rice domestication emerged ca. 8000−7400 years ago in the Kuahuqiao area, at the apex of the Bay, but no solid evidence implies a simultaneous domestication at any other places in this region. This paper presents new archaeobotanical and geological evidence of early rice domestication in the Yaojiang Valley from a well-dated sediment core retrieved near the Jingtoushan site, the earliest shell mound discovered in eastern coastal China. Phytolith combined with other microfossil evidence elucidated when and under what circumstance rice domestication became available in South Hangzhou Bay. Humans apparently started to occupy the site area 8200−7800 years ago, with rice domestication after ca. 7600 cal yr BP revealed by the emergence of charcoal and bulliform phytoliths with ≥ 9 fish-scale decorations. A marine-influenced setting transformed to a desalinized wetland environment would have encouraged the early arrivals to attempt rice domestication. Rice domestication became available in the Bay 7600 years ago, but human subsistence relied on hunting and gathering until rice farming became widespread during the later Hemudu occupation (ca. 7000−5000 cal yr BP) along with demographic expansion. This new evidence sheds light on the synchronous early rice domestication around South Hangzhou Bay in the early mid-Holocene. It documents the trajectory of rice farming between the Kuahuqiao and Hemudu Cultures with implications for understanding the complex rice dispersal and domestication process in coastal regions of China.