Wounding is a general stress in plants that results from various pest and pathogenic infections in addition to environment-induced mechanical damages. Plants have sophisticated molecular mechanisms to recognize and respond to wounding, with those of monocots being distinct from dicots. Here, we show the involvement of two distinct categories of temporally separated, endogenously derived peptides, namely, plant elicitor peptides (PEPs) and phytosulfokine (PSK), mediating wound responses in rice. These peptides trigger a dynamic signal relay in which a receptor kinase involved in PSK perception named OsPSKR plays a major role. Perturbation of OsPSKR expression in rice leads to compromised development and constitutive autoimmune phenotypes. OsPSKR regulates the transitioning of defense to growth signals upon wounding. OsPSKR displays mutual antagonism with the OsPEPR1 receptor involved in PEP perception. Collectively, our work indicates the presence of a stepwise peptide-mediated signal relay that regulates the transition from defense to growth upon wounding in monocots.