Abstract Background Transposable elements (TEs) are prominent features in many plant genomes, and patterns of TEs in closely related rice species are thus proposed as an ideal model to study TEs roles in the context of plant genome evolution. As TEs may contribute to improved rice growth and grain quality, it is of pivotal significance for worldwide food security and biomass production. Results We analyzed three cultivated rice species and their closest five wild relatives for distribution and content of TEs in their genomes. Despite that the three cultivar rice species contained similar copies and more total TEs, their genomes contained much longer TEs as compared to their wild relatives. Notably, TEs were largely depleted from genomic regions that corresponded to genes in the cultivated species, while this was not the case for their wild relatives. Gene ontology and gene homology analyses revealed that while certain genes contained TEs in all the wild species, the closest homologs in the cultivated species were devoid of them. This distribution of TEs is surprising as the cultivated species are more distantly related to each other as compared to their closest wild relative. Hence, cultivated rice species have more similar TE distributions among their genes as compared to their closest wild relatives. We, furthermore, exemplify how genes that are conferring important rice traits can be regulated by TE associations. Conclusions This study demonstrate that the cultivation of rice has led to distinct genomic distribution of TEs, and that certain rice traits are closely associated with TE distribution patterns. Hence, the results provide means to better understand TE-dependent rice traits and the potential to genetically engineer rice for better performance.